{"content_id":"ufh4ifanp0","slug":"zombie-etf-korea-liquidity-delisting-criteria","locale":"en","schema_type":"Article","category":"knowledge_base","category_name":"Knowledge Base","title":"Zombie ETFs in Korea: Thin Trading and Delisting Rules","summary":"Zombie ETF is an informal term for a rarely traded product. Delisting requirements in Korea should be distinguished from thin trading, and actual selling conditions should be checked using price quotes and net asset value.","sponsorship_disclosure":null,"affiliate_disclosure":null,"commerce_disclosure":null,"author":{"name":"Injoys Editorial Team","url":"https://injoys.com/ko/about"},"key_points":["Zombie ETF is an informal term, not an official designation for securities under administrative supervision.","According to reports as of October 2, 2026, 239 ETFs had an average daily trading value of less than KRW 100 million over the previous 6 months.","Whether an ETF is placed under administrative supervision based on its size depends on whether its trust principal and total net assets are both less than KRW 5 billion.","Do not judge whether you can sell based on trading volume alone; also check bid-ask spreads and order sizes.","Redemption payments upon termination after delisting are calculated based on net asset value and do not guarantee recovery of the amount invested."],"content_markdown":"Zombie ETFs are products that remain listed despite having very little trading activity. Low trading activity alone does not lead to immediate delisting. If you hold one, check both its net assets and actual ask prices.\n\nThe figures on low trading activity come from a tally as of October 2, published in Maekyung ECONOMY's October 8, 2026 report.\n\n## What Zombie ETFs Are and the Extent of Low Trading Activity\n\nZombie ETF is an informal term for an ETF that trades infrequently. It is not a separate product category defined by the exchange. Classification criteria may therefore differ between articles.\n\nMaekyung ECONOMY reported the following figures, citing a Korea Exchange tally. Trading value was measured over the six months before the reference date. Products with an average daily trading value of less than KRW 100 million accounted for **more than 20%** of the total.\n\n| Category | Reported figures as of October 2, 2026 |\n| --- | ---: |\n| All ETFs listed in Korea | 1,171 |\n| Average daily trading value of less than KRW 100 million over the past six months | 239 |\n| Meeting both the trading value condition above and an average daily trading volume of less than 5,000 units | 186 |\n\nThe figures of 239 and 186 were counted using different conditions. Adding the two groups would count the same products twice. These figures alone also do not establish that every product is difficult to sell. [Maekyung ECONOMY tally of low trading activity](https://www.mk.co.kr/news/economy/12171679)\n\n## Why Some Products Have Low Trading Activity\n\nLaunching similar thematic products at the same time can spread trading across them. Investor demand may then concentrate on a few leading products. If interest in the theme also declines, trading in the remaining products falls further.\n\nSpace industry and metaverse ETFs illustrate this competition. On October 13, 2021, four metaverse ETFs were listed together. Low trading activity in some products was later reported.\n\nAn increase in the number of products does not mean their investment strategies are distinct. Even products with different names may hold overlapping securities. When comparing them, check the following.\n\n- How the underlying index or benchmark index is constructed\n- Major holdings and the weight of each holding\n- Whether currency exposure is hedged and how the fund is managed\n- Costs beyond the total fee and actual trading conditions\n\nFee cuts help reduce holding costs. However, wide bid-ask spreads can increase trading costs. It is difficult to choose a product based on its fee rate alone.\n\n## Delisting Criteria for ETFs in Korea\n\nLow trading value alone does not lead to immediate delisting. Decisions follow separate criteria, including minimum size requirements and liquidity provision agreements. Even if a product's size exceeds the threshold, other grounds for delisting may arise.\n\nThe Korea Exchange applies its criteria for managing small ETFs in the following order.\n\n1. Check whether one year has passed since the listing date.\n2. Assess trust principal and total net assets at the end of the half-year.\n3. Designate the ETF as an issue under administration if both amounts are less than KRW 5 billion.\n4. Delist it if the same grounds persist at the end of the following half-year.\n\nTrust principal is the principal amount reflecting fund creations and redemptions. Total net assets are the fund's assets minus its liabilities. The size requirement checks whether both amounts are less than KRW 5 billion.\n\nThe size criterion in the Korea Exchange's “ETF Delisting” guide is as follows.\n\n\u003e Where an ETF has been designated as an issue under administration because its trust principal (capital) and total net assets are less than KRW 5 billion, and the same grounds persist at the end of the following half-year\n\nNet assets alone therefore cannot determine whether a listing will be maintained. The absence of an LP agreement or termination of the investment trust are separate grounds. Check the latest disclosures for the grounds that apply to an individual product. [Korea Exchange delisting guide](https://listing.krx.co.kr/contents/LST/06/06010600/LST06010600.jsp)\n\n### How Does Voluntary Termination Differ from Falling Below the Size Requirement?\n\nAn asset manager's voluntary termination of an investment trust is a different procedure from the exchange's size review. Small funds that meet certain requirements can already be voluntarily terminated. It is inaccurate to say that no voluntary closure mechanism exists.\n\n| Category | What is assessed | Points to note when interpreting it |\n| --- | --- | --- |\n| Failure to meet minimum size requirements | Principal and net assets at the end of the half-year, and whether the grounds persist | A temporary decline in net assets alone does not establish the outcome |\n| Voluntary termination of a small investment trust | Statutory termination requirements and the asset manager's decision | Separate from the procedure for designation as an issue under administration |\n| Expiration of the fund's term | Arrival of the end date set when the fund was established | Includes scheduled closures unrelated to low trading activity |\n| Failure to meet the correlation coefficient requirement | How closely the daily movements of the ETF and its index resemble each other | A different criterion from poor returns alone |\n\nThe total number of delistings cannot be treated as the number of zombie ETFs. It also includes products that close as planned when their terms expire. The Korea Capital Market Institute explained this distinction in its October 2026 report. [Changes in the Reasons for ETF Delistings in Korea and Points for Investors to Note](https://www.kcmi.re.kr/publications/pub_detail_view?cno=6860\u0026syear=2026\u0026zcd=002001016\u0026zno=1939)\n\n## Conditions Compared: Trading Volume and the Ability to Sell\n\nTo assess actual selling conditions, look at both trading volume and current quotes. Trading volume is the quantity already traded. Quotes are the prices currently offered to buy or sell.\n\nA liquidity provider (LP) is an institution that posts bid and ask quotes. LP quotes make trading possible even for ETFs that trade infrequently. They do not, however, guarantee execution at your desired price and quantity. [Korea Exchange guide to the LP system](https://regulation.krx.co.kr/contents/RGL/03/03060103/RGL03060103.jsp)\n\n| Product's current condition | Interpretation | What to check |\n| --- | --- | --- |\n| Low trading volume but sufficient bid and ask quotes | Past trading volume alone is not enough to conclude that selling will be difficult | Outstanding buy orders that can absorb your order quantity |\n| Low trading volume and a wide bid-ask spread | Trading at your desired price may be difficult | Difference between bid and ask prices |\n| Large net assets but infrequent trading | Asset size and trading activity are separate matters | LP quotes and trading value trends |\n| Active trading but a sharp drop in the theme's stock prices | Ease of trading and investment loss risk are separate matters | Holdings and price movements |\n| Disclosures concerning designation as an issue under administration or delisting | Assessment must follow the disclosed grounds and schedule | Whether the grounds have been resolved and the trading suspension date |\n\nThe difference between the ask price and the bid price is called the bid-ask spread. If this gap is wide, you may have to accept an unfavorable price when trading. If you hold a large quantity, also check outstanding buy orders at each price level.\n\n## Common Mistakes: Confusing Trading Value with Loss Risk\n\nLow trading activity is a signal to check, but it does not indicate a loss rate. Trading volume and trading value are also indicators measured in different units. When reading figures in an article, make the following distinctions.\n\n| Common interpretation | Correct distinction |\n| --- | --- |\n| Trading volume is KRW 100 million | Trading volume is measured in units; trading value is measured in Korean won |\n| A product is safe if its net assets exceed KRW 5 billion | Size requirements and the risk of falling asset prices are separate matters |\n| Low trading volume means you cannot sell | Check current bid prices and outstanding buy orders separately |\n| An LP lets you sell at your desired price | An obligation to provide quotes is not a guarantee of execution |\n| ETF delisting means losing all your principal | Termination proceeds are paid after the holdings are liquidated |\n| Waiting until liquidation means getting your original investment back | Proceeds are calculated based on net asset value and other factors |\n\n## Comparing Selling and Redemption upon Termination After a Delisting Announcement\n\nWhen a delisting is announced, compare the terms for selling and redemption upon termination. The applicable price and the timing of access to your money differ. It is not possible to determine in advance which option will be more favorable.\n\n| Item | Selling on the exchange before trading is suspended | Continuing to hold for redemption upon termination |\n| --- | --- | --- |\n| Basis for the amount | Actual order execution price | Net asset value and other factors under the disclosed termination terms |\n| When cash becomes available | After settlement of the sale proceeds | Disclosed payment date for termination proceeds |\n| Price-related details to check | Bid prices and outstanding buy orders | Termination valuation date and method for calculating proceeds |\n| Main uncertainties | Unfavorable execution price or failure to execute | Prices, exchange rates, and costs during asset liquidation |\n\nTermination proceeds do not simply return the amount you originally invested. If asset prices have fallen, losses may be reflected. You should not assume that the trading suspension date and the payment date for proceeds are the same.\n\nKorea Investment Management's delisting-related disclosure also explains these two options. You can sell on the exchange before trading is suspended. If you continue to hold, you receive termination proceeds based on net asset value. [KIND investor notice concerning delisting](https://kind.krx.co.kr/external/2026/05/07/000127/20260507000183/68629.htm)\n\n## Criteria for Comparing Statistics on Low Trading Activity\n\nWhether zombie ETFs have increased must be assessed using a time series based on consistent criteria. The proportion at a particular point shows the distribution at that point. Without earlier figures, the rate of increase cannot be calculated.\n\nRecently listed ETFs, in particular, may have shorter observation periods. Results may vary depending on how average trading value is calculated. To compare the data, record the following together.\n\n- Reference date and observation period for trading value\n- Amount and unit thresholds used to classify low trading activity\n- How days with no trades are included in the average\n- How observation periods for newly listed products are handled\n- How delisted products are included in the comparison\n\nThe Maekyung ECONOMY article does not provide the detailed formula for calculating the averages. It is therefore more accurate to cite “more than 20%” as a reported tally. To reproduce it yourself, specify the query conditions used for Korea Exchange trading data.\n\n## Steps for Checking ETFs You Hold\n\nWhen assessing a product you hold, start with the latest disclosures and current quotes. Use the ticker code to avoid confusing products with similar names. If you are considering selling, also note when you need the money.\n\n1. Check disclosures on the Korea Exchange's KIND using the ticker code.\n2. Read the grounds for designation as an issue under administration or for the announced delisting.\n3. Check bid prices and outstanding buy orders on your brokerage platform.\n4. Compare the market price with iNAV, the intraday indicative net asset value.\n5. If you choose to sell, set your order price and quantity.\n6. If delisting is scheduled, record the final trading date and payment date.\n\nA limit order lets you set the price you are willing to accept. However, it will not be executed if there is no counterparty at that price. A market order may execute at a less favorable price than expected, depending on the available quotes.\n\n## Improving Product Reviews and Ongoing Oversight\n\nSystem improvements need to address both product differentiation and the process for recovering invested funds. The number of listed products alone is not enough to assess market quality. Closing every product simply because it trades infrequently also has limitations.\n\nInvest Chosun reported on repeated launches of similar products and problems with the review system. These are concerns raised within the industry, not measures confirmed for implementation. When assessing discussions of improvements, distinguish the following areas. [Invest Chosun report on the ETF review system](https://www.investchosun.com/site/data/html_dir/2025/12/12/2025121280190.html)\n\n- Product review: Whether the investment strategy differs from existing ETFs\n- Ongoing oversight: Whether LP quotes and disclosures are properly maintained\n- Product closure: Whether holders have sufficient information about the timeline for recovering their funds\n- Investor choice: Whether holders can compare the conditions for continuing to hold and selling","content_html":"\u003cp\u003eZombie ETFs are products that remain listed despite having very little trading activity. Low trading activity alone does not lead to immediate delisting. If you hold one, check both its net assets and actual ask prices.\u003c/p\u003e\n\u003cp\u003eThe figures on low trading activity come from a tally as of October 2, published in Maekyung ECONOMY's October 8, 2026 report.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#what-zombie-etfs-are-and-the-extent-of-low-trading-activity\" class=\"anchor\" id=\"what-zombie-etfs-are-and-the-extent-of-low-trading-activity\"\u003e\u003c/a\u003eWhat Zombie ETFs Are and the Extent of Low Trading Activity\u003c/h2\u003e\n\u003cp\u003eZombie ETF is an informal term for an ETF that trades infrequently. It is not a separate product category defined by the exchange. Classification criteria may therefore differ between articles.\u003c/p\u003e\n\u003cp\u003eMaekyung ECONOMY reported the following figures, citing a Korea Exchange tally. Trading value was measured over the six months before the reference date. Products with an average daily trading value of less than KRW 100 million accounted for \u003cstrong\u003emore than 20%\u003c/strong\u003e of the total.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCategory\u003c/th\u003e\n\u003cth\u003eReported figures as of October 2, 2026\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eAll ETFs listed in Korea\u003c/td\u003e\n\u003ctd data-label=\"Reported figures as of October 2, 2026\"\u003e1,171\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eAverage daily trading value of less than KRW 100 million over the past six months\u003c/td\u003e\n\u003ctd data-label=\"Reported figures as of October 2, 2026\"\u003e239\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eMeeting both the trading value condition above and an average daily trading volume of less than 5,000 units\u003c/td\u003e\n\u003ctd data-label=\"Reported figures as of October 2, 2026\"\u003e186\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThe figures of 239 and 186 were counted using different conditions. Adding the two groups would count the same products twice. These figures alone also do not establish that every product is difficult to sell. \u003ca href=\"https://www.mk.co.kr/news/economy/12171679\"\u003eMaekyung ECONOMY tally of low trading activity\u003c/a\u003e\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#why-some-products-have-low-trading-activity\" class=\"anchor\" id=\"why-some-products-have-low-trading-activity\"\u003e\u003c/a\u003eWhy Some Products Have Low Trading Activity\u003c/h2\u003e\n\u003cp\u003eLaunching similar thematic products at the same time can spread trading across them. Investor demand may then concentrate on a few leading products. If interest in the theme also declines, trading in the remaining products falls further.\u003c/p\u003e\n\u003cp\u003eSpace industry and metaverse ETFs illustrate this competition. On October 13, 2021, four metaverse ETFs were listed together. Low trading activity in some products was later reported.\u003c/p\u003e\n\u003cp\u003eAn increase in the number of products does not mean their investment strategies are distinct. Even products with different names may hold overlapping securities. When comparing them, check the following.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eHow the underlying index or benchmark index is constructed\u003c/li\u003e\n\u003cli\u003eMajor holdings and the weight of each holding\u003c/li\u003e\n\u003cli\u003eWhether currency exposure is hedged and how the fund is managed\u003c/li\u003e\n\u003cli\u003eCosts beyond the total fee and actual trading conditions\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eFee cuts help reduce holding costs. However, wide bid-ask spreads can increase trading costs. It is difficult to choose a product based on its fee rate alone.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#delisting-criteria-for-etfs-in-korea\" class=\"anchor\" id=\"delisting-criteria-for-etfs-in-korea\"\u003e\u003c/a\u003eDelisting Criteria for ETFs in Korea\u003c/h2\u003e\n\u003cp\u003eLow trading value alone does not lead to immediate delisting. Decisions follow separate criteria, including minimum size requirements and liquidity provision agreements. Even if a product's size exceeds the threshold, other grounds for delisting may arise.\u003c/p\u003e\n\u003cp\u003eThe Korea Exchange applies its criteria for managing small ETFs in the following order.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eCheck whether one year has passed since the listing date.\u003c/li\u003e\n\u003cli\u003eAssess trust principal and total net assets at the end of the half-year.\u003c/li\u003e\n\u003cli\u003eDesignate the ETF as an issue under administration if both amounts are less than KRW 5 billion.\u003c/li\u003e\n\u003cli\u003eDelist it if the same grounds persist at the end of the following half-year.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eTrust principal is the principal amount reflecting fund creations and redemptions. Total net assets are the fund's assets minus its liabilities. The size requirement checks whether both amounts are less than KRW 5 billion.\u003c/p\u003e\n\u003cp\u003eThe size criterion in the Korea Exchange's “ETF Delisting” guide is as follows.\u003c/p\u003e\n\u003cblockquote\u003e\n\u003cp\u003eWhere an ETF has been designated as an issue under administration because its trust principal (capital) and total net assets are less than KRW 5 billion, and the same grounds persist at the end of the following half-year\u003c/p\u003e\n\u003c/blockquote\u003e\n\u003cp\u003eNet assets alone therefore cannot determine whether a listing will be maintained. The absence of an LP agreement or termination of the investment trust are separate grounds. Check the latest disclosures for the grounds that apply to an individual product. \u003ca href=\"https://listing.krx.co.kr/contents/LST/06/06010600/LST06010600.jsp\"\u003eKorea Exchange delisting guide\u003c/a\u003e\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#how-does-voluntary-termination-differ-from-falling-below-the-size-requirement\" class=\"anchor\" id=\"how-does-voluntary-termination-differ-from-falling-below-the-size-requirement\"\u003e\u003c/a\u003eHow Does Voluntary Termination Differ from Falling Below the Size Requirement?\u003c/h3\u003e\n\u003cp\u003eAn asset manager's voluntary termination of an investment trust is a different procedure from the exchange's size review. Small funds that meet certain requirements can already be voluntarily terminated. It is inaccurate to say that no voluntary closure mechanism exists.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCategory\u003c/th\u003e\n\u003cth\u003eWhat is assessed\u003c/th\u003e\n\u003cth\u003ePoints to note when interpreting it\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eFailure to meet minimum size requirements\u003c/td\u003e\n\u003ctd data-label=\"What is assessed\"\u003ePrincipal and net assets at the end of the half-year, and whether the grounds persist\u003c/td\u003e\n\u003ctd data-label=\"Points to note when interpreting it\"\u003eA temporary decline in net assets alone does not establish the outcome\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eVoluntary termination of a small investment trust\u003c/td\u003e\n\u003ctd data-label=\"What is assessed\"\u003eStatutory termination requirements and the asset manager's decision\u003c/td\u003e\n\u003ctd data-label=\"Points to note when interpreting it\"\u003eSeparate from the procedure for designation as an issue under administration\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eExpiration of the fund's term\u003c/td\u003e\n\u003ctd data-label=\"What is assessed\"\u003eArrival of the end date set when the fund was established\u003c/td\u003e\n\u003ctd data-label=\"Points to note when interpreting it\"\u003eIncludes scheduled closures unrelated to low trading activity\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eFailure to meet the correlation coefficient requirement\u003c/td\u003e\n\u003ctd data-label=\"What is assessed\"\u003eHow closely the daily movements of the ETF and its index resemble each other\u003c/td\u003e\n\u003ctd data-label=\"Points to note when interpreting it\"\u003eA different criterion from poor returns alone\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThe total number of delistings cannot be treated as the number of zombie ETFs. It also includes products that close as planned when their terms expire. The Korea Capital Market Institute explained this distinction in its October 2026 report. \u003ca href=\"https://www.kcmi.re.kr/publications/pub_detail_view?cno=6860\u0026amp;syear=2026\u0026amp;zcd=002001016\u0026amp;zno=1939\"\u003eChanges in the Reasons for ETF Delistings in Korea and Points for Investors to Note\u003c/a\u003e\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#conditions-compared-trading-volume-and-the-ability-to-sell\" class=\"anchor\" id=\"conditions-compared-trading-volume-and-the-ability-to-sell\"\u003e\u003c/a\u003eConditions Compared: Trading Volume and the Ability to Sell\u003c/h2\u003e\n\u003cp\u003eTo assess actual selling conditions, look at both trading volume and current quotes. Trading volume is the quantity already traded. Quotes are the prices currently offered to buy or sell.\u003c/p\u003e\n\u003cp\u003eA liquidity provider (LP) is an institution that posts bid and ask quotes. LP quotes make trading possible even for ETFs that trade infrequently. They do not, however, guarantee execution at your desired price and quantity. \u003ca href=\"https://regulation.krx.co.kr/contents/RGL/03/03060103/RGL03060103.jsp\"\u003eKorea Exchange guide to the LP system\u003c/a\u003e\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eProduct's current condition\u003c/th\u003e\n\u003cth\u003eInterpretation\u003c/th\u003e\n\u003cth\u003eWhat to check\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Product's current condition\"\u003eLow trading volume but sufficient bid and ask quotes\u003c/td\u003e\n\u003ctd data-label=\"Interpretation\"\u003ePast trading volume alone is not enough to conclude that selling will be difficult\u003c/td\u003e\n\u003ctd data-label=\"What to check\"\u003eOutstanding buy orders that can absorb your order quantity\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Product's current condition\"\u003eLow trading volume and a wide bid-ask spread\u003c/td\u003e\n\u003ctd data-label=\"Interpretation\"\u003eTrading at your desired price may be difficult\u003c/td\u003e\n\u003ctd data-label=\"What to check\"\u003eDifference between bid and ask prices\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Product's current condition\"\u003eLarge net assets but infrequent trading\u003c/td\u003e\n\u003ctd data-label=\"Interpretation\"\u003eAsset size and trading activity are separate matters\u003c/td\u003e\n\u003ctd data-label=\"What to check\"\u003eLP quotes and trading value trends\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Product's current condition\"\u003eActive trading but a sharp drop in the theme's stock prices\u003c/td\u003e\n\u003ctd data-label=\"Interpretation\"\u003eEase of trading and investment loss risk are separate matters\u003c/td\u003e\n\u003ctd data-label=\"What to check\"\u003eHoldings and price movements\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Product's current condition\"\u003eDisclosures concerning designation as an issue under administration or delisting\u003c/td\u003e\n\u003ctd data-label=\"Interpretation\"\u003eAssessment must follow the disclosed grounds and schedule\u003c/td\u003e\n\u003ctd data-label=\"What to check\"\u003eWhether the grounds have been resolved and the trading suspension date\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThe difference between the ask price and the bid price is called the bid-ask spread. If this gap is wide, you may have to accept an unfavorable price when trading. If you hold a large quantity, also check outstanding buy orders at each price level.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#common-mistakes-confusing-trading-value-with-loss-risk\" class=\"anchor\" id=\"common-mistakes-confusing-trading-value-with-loss-risk\"\u003e\u003c/a\u003eCommon Mistakes: Confusing Trading Value with Loss Risk\u003c/h2\u003e\n\u003cp\u003eLow trading activity is a signal to check, but it does not indicate a loss rate. Trading volume and trading value are also indicators measured in different units. When reading figures in an article, make the following distinctions.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCommon interpretation\u003c/th\u003e\n\u003cth\u003eCorrect distinction\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common interpretation\"\u003eTrading volume is KRW 100 million\u003c/td\u003e\n\u003ctd data-label=\"Correct distinction\"\u003eTrading volume is measured in units; trading value is measured in Korean won\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common interpretation\"\u003eA product is safe if its net assets exceed KRW 5 billion\u003c/td\u003e\n\u003ctd data-label=\"Correct distinction\"\u003eSize requirements and the risk of falling asset prices are separate matters\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common interpretation\"\u003eLow trading volume means you cannot sell\u003c/td\u003e\n\u003ctd data-label=\"Correct distinction\"\u003eCheck current bid prices and outstanding buy orders separately\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common interpretation\"\u003eAn LP lets you sell at your desired price\u003c/td\u003e\n\u003ctd data-label=\"Correct distinction\"\u003eAn obligation to provide quotes is not a guarantee of execution\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common interpretation\"\u003eETF delisting means losing all your principal\u003c/td\u003e\n\u003ctd data-label=\"Correct distinction\"\u003eTermination proceeds are paid after the holdings are liquidated\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common interpretation\"\u003eWaiting until liquidation means getting your original investment back\u003c/td\u003e\n\u003ctd data-label=\"Correct distinction\"\u003eProceeds are calculated based on net asset value and other factors\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\n\u003ca href=\"#comparing-selling-and-redemption-upon-termination-after-a-delisting-announcement\" class=\"anchor\" id=\"comparing-selling-and-redemption-upon-termination-after-a-delisting-announcement\"\u003e\u003c/a\u003eComparing Selling and Redemption upon Termination After a Delisting Announcement\u003c/h2\u003e\n\u003cp\u003eWhen a delisting is announced, compare the terms for selling and redemption upon termination. The applicable price and the timing of access to your money differ. It is not possible to determine in advance which option will be more favorable.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eItem\u003c/th\u003e\n\u003cth\u003eSelling on the exchange before trading is suspended\u003c/th\u003e\n\u003cth\u003eContinuing to hold for redemption upon termination\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eBasis for the amount\u003c/td\u003e\n\u003ctd data-label=\"Selling on the exchange before trading is suspended\"\u003eActual order execution price\u003c/td\u003e\n\u003ctd data-label=\"Continuing to hold for redemption upon termination\"\u003eNet asset value and other factors under the disclosed termination terms\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eWhen cash becomes available\u003c/td\u003e\n\u003ctd data-label=\"Selling on the exchange before trading is suspended\"\u003eAfter settlement of the sale proceeds\u003c/td\u003e\n\u003ctd data-label=\"Continuing to hold for redemption upon termination\"\u003eDisclosed payment date for termination proceeds\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003ePrice-related details to check\u003c/td\u003e\n\u003ctd data-label=\"Selling on the exchange before trading is suspended\"\u003eBid prices and outstanding buy orders\u003c/td\u003e\n\u003ctd data-label=\"Continuing to hold for redemption upon termination\"\u003eTermination valuation date and method for calculating proceeds\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eMain uncertainties\u003c/td\u003e\n\u003ctd data-label=\"Selling on the exchange before trading is suspended\"\u003eUnfavorable execution price or failure to execute\u003c/td\u003e\n\u003ctd data-label=\"Continuing to hold for redemption upon termination\"\u003ePrices, exchange rates, and costs during asset liquidation\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eTermination proceeds do not simply return the amount you originally invested. If asset prices have fallen, losses may be reflected. You should not assume that the trading suspension date and the payment date for proceeds are the same.\u003c/p\u003e\n\u003cp\u003eKorea Investment Management's delisting-related disclosure also explains these two options. You can sell on the exchange before trading is suspended. If you continue to hold, you receive termination proceeds based on net asset value. \u003ca href=\"https://kind.krx.co.kr/external/2026/05/07/000127/20260507000183/68629.htm\"\u003eKIND investor notice concerning delisting\u003c/a\u003e\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#criteria-for-comparing-statistics-on-low-trading-activity\" class=\"anchor\" id=\"criteria-for-comparing-statistics-on-low-trading-activity\"\u003e\u003c/a\u003eCriteria for Comparing Statistics on Low Trading Activity\u003c/h2\u003e\n\u003cp\u003eWhether zombie ETFs have increased must be assessed using a time series based on consistent criteria. The proportion at a particular point shows the distribution at that point. Without earlier figures, the rate of increase cannot be calculated.\u003c/p\u003e\n\u003cp\u003eRecently listed ETFs, in particular, may have shorter observation periods. Results may vary depending on how average trading value is calculated. To compare the data, record the following together.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eReference date and observation period for trading value\u003c/li\u003e\n\u003cli\u003eAmount and unit thresholds used to classify low trading activity\u003c/li\u003e\n\u003cli\u003eHow days with no trades are included in the average\u003c/li\u003e\n\u003cli\u003eHow observation periods for newly listed products are handled\u003c/li\u003e\n\u003cli\u003eHow delisted products are included in the comparison\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eThe Maekyung ECONOMY article does not provide the detailed formula for calculating the averages. It is therefore more accurate to cite “more than 20%” as a reported tally. To reproduce it yourself, specify the query conditions used for Korea Exchange trading data.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#steps-for-checking-etfs-you-hold\" class=\"anchor\" id=\"steps-for-checking-etfs-you-hold\"\u003e\u003c/a\u003eSteps for Checking ETFs You Hold\u003c/h2\u003e\n\u003cp\u003eWhen assessing a product you hold, start with the latest disclosures and current quotes. Use the ticker code to avoid confusing products with similar names. If you are considering selling, also note when you need the money.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eCheck disclosures on the Korea Exchange's KIND using the ticker code.\u003c/li\u003e\n\u003cli\u003eRead the grounds for designation as an issue under administration or for the announced delisting.\u003c/li\u003e\n\u003cli\u003eCheck bid prices and outstanding buy orders on your brokerage platform.\u003c/li\u003e\n\u003cli\u003eCompare the market price with iNAV, the intraday indicative net asset value.\u003c/li\u003e\n\u003cli\u003eIf you choose to sell, set your order price and quantity.\u003c/li\u003e\n\u003cli\u003eIf delisting is scheduled, record the final trading date and payment date.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eA limit order lets you set the price you are willing to accept. However, it will not be executed if there is no counterparty at that price. A market order may execute at a less favorable price than expected, depending on the available quotes.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#improving-product-reviews-and-ongoing-oversight\" class=\"anchor\" id=\"improving-product-reviews-and-ongoing-oversight\"\u003e\u003c/a\u003eImproving Product Reviews and Ongoing Oversight\u003c/h2\u003e\n\u003cp\u003eSystem improvements need to address both product differentiation and the process for recovering invested funds. The number of listed products alone is not enough to assess market quality. Closing every product simply because it trades infrequently also has limitations.\u003c/p\u003e\n\u003cp\u003eInvest Chosun reported on repeated launches of similar products and problems with the review system. These are concerns raised within the industry, not measures confirmed for implementation. When assessing discussions of improvements, distinguish the following areas. \u003ca href=\"https://www.investchosun.com/site/data/html_dir/2025/12/12/2025121280190.html\"\u003eInvest Chosun report on the ETF review system\u003c/a\u003e\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eProduct review: Whether the investment strategy differs from existing ETFs\u003c/li\u003e\n\u003cli\u003eOngoing oversight: Whether LP quotes and disclosures are properly maintained\u003c/li\u003e\n\u003cli\u003eProduct closure: Whether holders have sufficient information about the timeline for recovering their funds\u003c/li\u003e\n\u003cli\u003eInvestor choice: Whether holders can compare the conditions for continuing to hold and selling\u003c/li\u003e\n\u003c/ul\u003e\n","tags":["Asset allocation","Investment","Long-term investment","Investor psychology"],"faqs":[{"question":"Is \"zombie ETF\" an official designation?","answer":"It is not an official designation. It is an informal term for ETFs that trade infrequently. Check exchange rules and disclosures to determine whether an ETF is designated for administrative supervision or delisted."},{"question":"Will an ETF be delisted if its average daily trading value is less than KRW 100 million?","answer":"That condition alone does not lead to immediate delisting. KRW 100 million is the threshold used in the cited report to classify low trading activity. Actual delisting is assessed separately based on grounds such as size maintenance requirements or termination of the investment trust."},{"question":"What is the difference between the counts of 239 and 186 ETFs with low trading activity?","answer":"The figure of 239 counts ETFs whose average daily trading value over the past 6 months was less than KRW 100 million. The figure of 186 counts ETFs that also met the condition of average daily trading volume of less than 5,000 units. Both figures are from reporting as of October 2, 2026."},{"question":"Is an ETF immediately designated for administrative supervision if its net assets are less than KRW 5 billion?","answer":"Net assets alone do not determine the designation. The assessment looks at an ETF's status at the end of a half-year after 1 year has passed since listing. If both the original trust principal and total net assets are less than KRW 5 billion, the ETF is subject to designation for administrative supervision based on its size."},{"question":"Is low trading volume acceptable if an ETF has substantial net assets?","answer":"Net asset size and ease of trading are separate matters. When you actually sell, check the current bid prices and the quantities available at those prices. Assess the risk of falling asset prices separately as well."},{"question":"If there is an LP, can I sell at my desired price at any time?","answer":"An LP does not guarantee execution at your desired price. Its role is to provide bid and ask quotes under certain conditions. Check the quotes and quantities immediately before placing an order."},{"question":"Will I lose my entire investment if an ETF is delisted?","answer":"Delisting itself does not mean that your entire investment is lost. If you continue to hold the ETF, you will receive redemption proceeds through the termination process. However, your original investment is not guaranteed."},{"question":"Should I sell before delisting?","answer":"Decide by comparing the current terms for selling with the terms for redemption upon termination. A sale uses the actual execution price. Redemption upon termination follows the disclosed calculation method and payment date."},{"question":"Does an increase in delistings mean that the number of zombie ETFs has also increased?","answer":"You cannot tell from the number of delistings alone. That number also includes ETFs that terminate when their scheduled duration ends. Determining whether low trading activity has increased requires a time series compiled using the same criteria."},{"question":"Where can I check delisting disclosures for an ETF I hold?","answer":"You can check Korea Exchange's KIND and disclosures from the asset manager. Searching by ticker code rather than product name can reduce confusion. Also check disclosures about changes to the reasons for delisting or the schedule."}],"sources":[{"url":"https://www.mk.co.kr/news/economy/12171679","title":"Maekyung ECONOMY, 1 in 5 ETFs Is a ‘Zombie’...Trading Dries Up After Chasing Themes, October 8, 2026","type":"data_point"},{"url":"https://www.krx.co.kr/contents/LST/06/06010500/LST06010500.jsp","title":"Korea Exchange, Watchlist Designation and Delisting of Small ETFs","type":"source"},{"url":"https://listing.krx.co.kr/contents/LST/06/06010600/LST06010600.jsp","title":"Korea Exchange, ETF Delisting Criteria","type":"source"},{"url":"https://regulation.krx.co.kr/contents/RGL/03/03060103/RGL03060103.jsp","title":"Korea Exchange, ETF LP System","type":"source"},{"url":"https://www.kcmi.re.kr/publications/pub_detail_view?cno=6860\u0026syear=2026\u0026zcd=002001016\u0026zno=1939","title":"Korea Capital Market Institute, Changes in Reasons for ETF Delistings in Korea and Investor Considerations, October 5, 2026","type":"source"},{"url":"https://kind.krx.co.kr/external/2026/05/07/000127/20260507000183/68629.htm","title":"Korea Investment Management, Investor Caution Notice Regarding the Delisting of the ACE TDF2050 Active Qualified ETF, May 7, 2026","type":"source"},{"url":"https://www.investchosun.com/site/data/html_dir/2025/12/12/2025121280190.html","title":"Invest Chosun, The Shadow of the 300 Trillion ETF Era: ‘Zombie ETFs’...Need to Overhaul the Screening System Comes into Focus, December 15, 2025","type":"source"}],"images":[{"id":2040,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MzEzNTEsInB1ciI6ImJsb2JfaWQifX0=--f24b1c5573b40959056917c4bdc9ca16f24dd4fb/ai-93ca2fff.webp","is_representative":true,"generation_method":"ai_photo","license":"ai_generated","mime_type":"image/webp","width":1536,"height":1024,"translations":{"ko":{"alt":"대형 시세 화면이 걸린 밝은 로비에서 짙은 회색 코트를 입고 서 있는 중년 남성","caption":"ETF의 매도 여건은 거래량만으로 판단하지 말고 호가 간격과 주문 수량을 함께 확인해야 합니다.","description":null},"en":{"alt":"A middle-aged man in a dark coat stands in a bright lobby beneath a large financial display.","caption":"Assessing whether an ETF can be sold requires checking bid-ask spreads and order size, not trading volume alone.","description":null},"ja":{"alt":"大きな相場表示画面のある明るいロビーに、濃いグレーのコートを着た中年男性が立っている","caption":"ETFの売却のしやすさは出来高だけで判断せず、売買気配の価格差と注文数量も確認する必要があります。","description":null},"es":{"alt":"Un hombre de mediana edad con abrigo oscuro está en un vestíbulo luminoso bajo una gran pantalla de cotizaciones.","caption":"Para evaluar la posibilidad de vender un ETF, hay que revisar la horquilla y el tamaño de la orden, no solo el volumen negociado.","description":null},"id":{"alt":"Pria paruh baya berjas gelap berdiri di lobi terang di bawah layar besar yang menampilkan grafik keuangan.","caption":"Kemudahan menjual ETF perlu dinilai dari selisih harga beli-jual dan ukuran pesanan, bukan hanya volume perdagangan.","description":null},"pt":{"alt":"Um homem de meia-idade com casaco escuro está num saguão iluminado sob uma grande tela de cotações.","caption":"Para avaliar a possibilidade de vender um ETF, é preciso verificar o spread e o tamanho da ordem, não apenas o volume negociado.","description":null},"zh-hant":{"alt":"一名穿著深灰色外套的中年男子站在明亮大廳內，身後上方是大型行情螢幕。","caption":"評估ETF是否容易賣出，不能只看成交量，還須確認買賣價差與委託數量。","description":null},"de":{"alt":"Ein Mann mittleren Alters im dunklen Mantel steht in einer hellen Halle unter einer großen Kurstafel.","caption":"Ob sich ein ETF verkaufen lässt, hängt nicht allein vom Handelsvolumen ab; auch Geld-Brief-Spanne und Ordergröße sind zu prüfen.","description":null}}},{"id":2041,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MzEzNTcsInB1ciI6ImJsb2JfaWQifX0=--6d190ff9e1198b02f3451db562f727d10b3be968/ai-d22e4fc2.webp","is_representative":false,"generation_method":"ai_semi","license":"ai_generated","mime_type":"image/webp","width":1536,"height":1024,"translations":{"ko":{"alt":"청록색 카디건을 입은 노년 여성이 서류 옆에 놓인 달력에서 화살표로 연결된 두 날짜를 짚고 있다.","caption":"ETF 상장폐지 후 해지상환금은 순자산가치를 바탕으로 산정되며 매입원금은 보장되지 않습니다.","description":null},"en":{"alt":"An older woman points to circled dates linked by an arrow on a calendar, with a document beside it.","caption":"After an ETF is delisted, redemption payments are based on net asset value and do not guarantee the original investment.","description":null},"ja":{"alt":"青緑色のカーディガンを着た年配の女性が、書類の横にあるカレンダーで矢印で結ばれた日付を指している。","caption":"ETFの上場廃止後の償還金は純資産価額を基に算定され、投資元本は保証されません。","description":null},"es":{"alt":"Una mujer mayor señala fechas marcadas y unidas por una flecha en un calendario, junto a un documento.","caption":"Tras la exclusión de cotización de un ETF, el reembolso se calcula según el valor liquidativo y no garantiza el capital invertido.","description":null},"id":{"alt":"Seorang lansia menunjuk tanggal yang dilingkari dan dihubungkan panah pada kalender, di samping dokumen.","caption":"Setelah ETF dihapus dari bursa, dana pelunasan dihitung berdasarkan nilai aset bersih dan tidak menjamin modal awal.","description":null},"pt":{"alt":"Uma mulher idosa aponta datas circuladas e ligadas por uma seta em um calendário, ao lado de um documento.","caption":"Após a retirada de um ETF da bolsa, o resgate é calculado com base no valor patrimonial líquido e não garante o capital investido.","description":null},"zh-hant":{"alt":"一位穿著藍綠色針織外套的年長女性，指著月曆上以箭頭相連的圈選日期，旁邊放著一份文件。","caption":"ETF下市後的清算償還金依淨資產價值計算，不保證返還原始投資本金。","description":null},"de":{"alt":"Eine ältere Frau zeigt auf eingekreiste, per Pfeil verbundene Kalenderdaten; daneben liegt ein Dokument.","caption":"Nach dem Delisting eines ETF richtet sich die Rückzahlung nach dem Nettoinventarwert; das eingesetzte Kapital ist nicht garantiert.","description":null}}}],"published_at":"2026-10-22T05:14:36+09:00","updated_at":"2026-10-22T05:14:36+09:00","license":"cc_by","translation_status":"reviewed","available_locales":["ko","en","ja","es"],"data_locales":["ko","en","ja","es","id","pt","zh-hant","de"],"url":"https://injoys.com/en/articles/zombie-etf-korea-liquidity-delisting-criteria"}