Recently, the demand for active (dynamic) exchange-traded funds (ETFs) that utilize long-term assets such as pension fund has surged among Korean investors. This differs from conventional index‑based ETFs in that it reacts more sensitively to market volatility and attempts to provide higher returns to investors.
In this trend, financial experts are pondering how the high volatility risk inherent in active ETFs can be managed. In particular, for theme‑style active ETFs, there is concern that concentrating investment in specific industries or themes may greatly amplify volatility. Accordingly, specialists strongly recommend a diversified‑investment strategy conducted alongside index‑based ETF. This approach aims not only at one single theme‑type ETF but also at combining with various index products to offset risk and stabilize returns.
One example highlighted the brand “TIME Global AI Active” that showcases representative index‑based active style, emphasizing its familiarity for domestic investors. From such examples, it becomes evident that an active ETF is more than just a return vehicle; it can simultaneously strengthen response to market volatility and enhance portfolio flexibility.
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