Semiconductor ETFs Rebound with Rising Returns: "Time to Pay Attention Again"

Major semiconductor companies such as Nvidia are showing strong performance, driven by the expansion of artificial intelligence (AI) data centers and increased demand for high-performance graphics processing units (GPUs). The returns of semiconductor-themed exchange-traded funds (ETFs) are also on the rise. As global geopolitical stability reduces uncertainty in the supply chain, individual investors are showing increased buying activity. Expectations for an improved memory market, in line with expanding AI infrastructure demand, are seen as having a positive impact on the market.

The "ACE Global Semiconductor TOP4 Plus SOLACTIVE ETF," launched in November 2022, is regarded as a product that effectively reflects the current trends of the global semiconductor industry. It diversifies investments by allocating approximately 20% each to leading companies in four areas within the semiconductor industry: memory, non-memory, foundry, and semiconductors. This diversification across industry sectors helps reduce risk.

According to the Korea Exchange, as of the closing price on the 18th, this ETF has recorded a return of 254.91% since its listing, surpassing 200%. Its six-month return stands at 39.28%, while its one-year return is 52.55%. The net asset size is reported at 367.5 billion won.

Recently, the ETF's performance has benefited from improved investment sentiment due to easing global volatility and growing expectations for Nvidia's performance in the second half of the year. Increasing the allocation to SK Hynix has also played a significant role.

The top company in each sector included in the ETF is expected to benefit directly from the growth of the AI semiconductor industry. Leading companies can effectively reflect AI semiconductor market trends due to their competitive edge. Strong performance can be anticipated. The current portfolio allocation is as follows: SK Hynix (21.82%), TSMC (20.39%), ASML (19.63%), and Nvidia (18.81%). A strategy of investing in representative companies by sector can help reduce the impact of volatility and is expected to deliver stable results for long-term investors.

Nam Yongsoo, Head of ETF Management at Korea Investment Management, stated, "As global competition in AI technology development intensifies and the industry grows, growth will continue to center on top companies with unrivaled technological capabilities in each of the four semiconductor sectors: memory, non-memory, foundry, and semiconductors."

He added, "Semiconductors are a sector that must be included in a long-term investment portfolio. I recommend long-term investment in the semiconductor industry, which is attracting attention for its future growth potential, by utilizing retirement pension accounts such as defined contribution (DC) plans, individual retirement pensions (IRP), and individual savings accounts (ISA)."

ETF products are performance-based, and past performance does not guarantee future results. Principal losses may occur depending on management outcomes.

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