The ChatGPT Craze Drives 'AI ETF' Returns to Soar

Initial IPO Shares Sold Out with 50-70% Returns
New Product Focusing on Generative AI to Launch Next Month
Global AI ETF Assets Expected to Reach 46.5 Trillion Won by 2030

Amid the strong ChatGPT craze, the market for exchange-traded funds (ETFs) investing in the artificial intelligence (AI) industry is also booming. AI-specialized ETF products are emerging one after another, and the returns of ETFs composed of AI-related big tech companies already listed continue to soar.

According to the asset management industry on the 15th, NH-Amundi Asset Management plans to launch the 'HANARO Global Generative AI Active' ETF next month, which focuses intensively on generative AI.

This is the first case of an ETF focusing intensively on generative AI to be listed domestically. The ETF’s returns are determined according to the 'Solactive Global AI Index.' It is an active type where the management company actively adds or removes stocks, rather than a passive type that follows the index passively. It is expected to be composed of 20 stocks including Nvidia, Microsoft, Alphabet, and Amazon.

Although AI-related ETFs have been launched recently, investor response has been explosive. TIMEFOLIO’s TIMEFOLIO Global AI Artificial Intelligence Active ETF, which was listed last month, sold all of its initial listing volume of 7 billion KRW. This ETF invests in leading global AI industry companies. It includes overseas companies such as Nvidia, Meta, and Microsoft, as well as domestic companies like SK Hynix, Maum AI, and Isu Petasys. As of the closing price on the 14th, the TIMEFOLIO Global AI Artificial Intelligence Active ETF rose 19% from the closing price on its first day of listing on the 16th of last month (10,075 KRW) to 11,985 KRW.

Although they do not explicitly carry the AI ETF name, ETFs expected to benefit from ChatGPT continue to post soaring returns day after day. According to the Korea Exchange, as of the closing price on the 14th, the 'TIGER US Tech TOP10 INDXX ETF' was priced at 12,950 KRW, recording a 59.5% return since the beginning of the year. This product invests in the top 10 companies by market capitalization on the Nasdaq, representing US technology stocks. It has been recognized as a representative beneficiary ETF with the emergence of ChatGPT.

The US big tech companies invested in by the TIGER US Tech TOP10 INDXX ETF, including Microsoft, Alphabet, Meta, Amazon, and Apple, have recently announced earnings that exceeded market expectations in both revenue and earnings per share, causing returns to rapidly soar. These large tech stocks, which were the main beneficiaries of COVID-19 and led the US stock market in recent years, experienced a sharp decline last year but have been rebounding since the beginning of this year. In particular, the rise of Nvidia and Meta stands out. Although it includes electric vehicles and cannot be considered a direct AI beneficiary, the KODEX US FANG Plus (H), which focuses intensively on 10 global leading innovative companies mainly in semiconductors, AI, metaverse, and platform businesses, also rose 71.7% to 28,685 KRW as of the closing price on the 14th compared to the beginning of the year.

ETFs related to high-performance semiconductors, which are essential for operating generative AI, are also strong. The 'TIGER US Philadelphia Semiconductor Nasdaq' ETF, which tracks the Philadelphia Semiconductor Index, is also benefiting significantly from the ChatGPT craze. As of the closing price on the 14th, the TIGER US Philadelphia Semiconductor Nasdaq ETF was priced at 12,535 KRW, achieving a 47% return since the beginning of the year. Although various industries will benefit from AI development, the sector where product demand directly increases can be seen as semiconductors. High-performance semiconductors are essential components when operating ChatGPT models.

With the generative AI craze represented by ChatGPT, the related ETF market is expected to expand further. Bloomberg News cited a report from its economic research institute, Bloomberg Intelligence (BI), forecasting that the global AI ETF assets under management will expand to $35 billion (approximately 46.5 trillion KRW) by 2030. It predicts that the assets under management of ETFs tracking AI-related companies will more than triple by 2030 compared to now.

This content was produced with the assistance of AI translation services.