This article was published on June 23, 2025, at 3:55 p.m. on the ChosunBiz MoneyMove site.
In June, when major asset management companies performed regular rebalancing of K-REITs ETFs (exchange-traded funds), a phenomenon occurred where the stock prices of the items that were reduced fell sharply. The ETF sold some of the holdings as part of the rebalancing, and the stock price dropped excessively due to a lack of buying power.
In contrast, since investments in re-structured REITs ETFs were allowed, the IGIS Value Plus REIT increased by over 13% within three trading days. Some experts explain that this phenomenon arose because the size of the REITs ETF market is too large compared to the size and trading volume of listed REITs.
According to the financial investment industry on the 23rd, the stock price of the IGIS Value Plus REIT rose 13.4% from 4,455 won on the 11th to 5,050 won on the 16th. This was influenced by major asset management companies such as Mirae Asset and Samsung including this REIT in their ETF portfolios during the regular rebalancing on the 12th and 13th. The market capitalization of the IGIS Value Plus REIT was approximately 240 billion won as of that day, which meets the usual ETF inclusion requirement of a market cap between 100 billion and 200 billion won. Since March of this year, ETFs have been able to invest in newly listed restructured REITs, making inclusion possible.
Conversely, the stocks that were excluded from the REITs ETF portfolio in this instance experienced excessive drops in their prices. The same was true for other stocks from which some were sold to purchase newly included listed REITs. For example, Samsung Asset Management raised the average market cap criteria from 100 billion won to 200 billion won when including stocks, and excluded Shinhan West T&D REIT, Mirae Asset Global REIT, and NH All One REIT from the portfolio. As a result, Shinhan West T&D fell by 3.0% on the 12th and 4.8% on the 13th, while Mirae Asset Global REIT fell 4.2% and NH All One REIT dropped 5.5% during the same period.
This situation arose because the transactions in the ETF market were active, even though listed REITs are relatively large in size. The domestic REITs ETF market was only about 300 billion won at the end of 2023, but has recently grown to a net worth of nearly 1 trillion won. ▲ The net worth of Mirae Asset Global Investments' 'Tiger' REIT real estate infrastructure is approximately 660 billion won ▲ Samsung Asset Management's 'Kodex' Korean real estate REIT infrastructure is about 320 billion won ▲ Kiwoom Asset Management's Won Korean Real Estate Top 3 Plus is about 10 billion won ▲ Hanwha's Plus K-REIT is about 9 billion won ▲ Kiwoom Asset Management's Heroes REIT EGIS Active is approximately 3 billion won, among others.
As of the end of last month, the market capitalization of listed REITs is about 8.5 trillion won, which is not insignificant, but the issue lies in the trading volume. Since REITs are not popular stocks with high trading volumes, the scale of transactions is small compared to their size. As a result, stock prices inevitably fluctuate according to ETF trading.
Some asset management companies are looking for ways to minimize shocks, such as conducting block deals (off-market large transactions) by finding buyers in advance rather than dumping stock into the market, but the impact on the market remains significant.
Industry insiders expect that Daishin Financial Group's Daishin Value REIT, which is set to list on the stock market on July 10, will be another variable. The public offering price for this REIT is a fixed price of 5,000 won, with the total order volume reaching 430 billion won. As a massive listed REIT aiming to grow over 2 trillion won in size within five years, large-scale transactions are expected when asset management companies include it in their portfolios.
An industry official noted, "The 1% of the holdings that the ETF management company holds is roughly comparable to the combined daily transaction volume of five large REITs, highlighting that the Korean REIT market is still relatively small, necessitating caution in investments," while also explaining that "if the goal is to achieve dividend revenue, buying stocks that have fallen in price due to rebalancing can also be a good investment strategy."
☞ ETF rebalancing
An ETF is a product that allows investors to invest in multiple assets at once, with the ratios of assets determined according to investment goals. When this ratio is disrupted due to market fluctuations or changes in stocks, the process of readjusting it to align with the original investment goals is known as rebalancing. Asset managers typically conduct rebalancing quarterly (four times a year) or semi-annually (twice a year), but sometimes do so irregularly.