ETF Returns Dominated by US Leaders... Retail Investors Storm Buy Betting on 'Continued Rise'

"Impact of AI Trends on US Stock Market Rise"
"Not a Temporary Theme... Continued Uptrend Expected"

The returns of exchange-traded funds (ETFs) related to U.S. big tech (large information technology companies) are outperforming the KOSPI. This is attributed to the sustained rise in the U.S. stock market driven by concentrated investment in the artificial intelligence (AI) mega trend. In particular, domestic individual investors are also actively purchasing overseas ETFs.

According to the Korea Exchange on the 26th, an analysis of ETF returns from the 22nd to the 24th of last month showed that ACE U.S. Big Tech TOP7 Plus Leverage ranked first with a return of 30.62%. Following were PLUS U.S. Tech TOP10 Leverage and ACE Tesla Value Chain Active, recording 25.82% and 21.83%, respectively, taking second and third place. Additionally, most of the top-ranking ETFs were overseas-related, including TIGER U.S. Philadelphia Semiconductor Leverage, ACE Global AI Customized Semiconductor, TIGER U.S. Nasdaq 100 Leverage, and PLUS Global AI.

This upward trend is interpreted as a result of the U.S. stock market reaching all-time highs this year, powered by big tech. Although the U.S. stock market experienced some corrections after the Federal Reserve (Fed) recently signaled a slowdown in interest rate cuts next year, it is now showing signs of rebound.

Seunghyun Kim, ETF Consulting Manager at Korea Asset Trust Management, explained, "As the U.S. stock market has been hitting new highs daily this year, U.S. investment ETFs have dominated the top returns. The ETFs with solid recent returns were related to industries benefiting from the massive AI trend, such as big tech and semiconductors."

Chanyoung Kim, Head of ETF Business Division at KB Asset Management, stated, "The differentiated rise centered on big tech due to investor focus on the AI mega trend has continued throughout 2024. Since the AI theme is expected to be sustained rather than a temporary trend lasting one to two years, the rise of big tech is expected to continue."

A representative from Mirae Asset Management emphasized, "The main growth driver for U.S. big tech this year appears to be the approaching commercialization of the AI industry. This reflects expectations for solid earnings announcements and strong market competitiveness from semiconductor companies playing the most critical role in AI industry development, as well as big tech firms providing cloud and software services."

As the returns of U.S.-related ETFs show strong performance, individual net purchases continue. From the 24th of last month to the 23rd of this month, the top individual net purchase was TIGER U.S. S&P 500, with purchases totaling 357.76292 billion KRW. Other ETFs frequently appearing in individual net purchases included TIGER U.S. Dividend Dow Jones, KODEX U.S. S&P 500 TR, TIGER U.S. Nasdaq 100, TIGER U.S. Philadelphia AI Semiconductor Nasdaq, and KODEX U.S. Nasdaq 100 TR.