Korea Investment Management Rebalances Three ACE Value Chain Active ETF Series

Korea Investment Management announced on December 8 that it has completed an emergency asset reallocation (rebalancing) for three of its ACE Value Chain Active Exchange Traded Funds (ETFs).

The ETFs subject to rebalancing are: ▲ACE Google Value Chain Active ETF ▲ACE Nvidia Value Chain Active ETF ▲ACE Microsoft Value Chain Active ETF.

Korea Investment Management explained that the asset reallocation was carried out to reflect structural changes in the artificial intelligence (AI) industry. The company adjusted its portfolios to account for the AI market shifting from an early expansion phase to a stage of market share competition among different camps, with major big tech companies building their own independent AI ecosystems and entering into full-scale competition.

The ACE Google Value Chain Active ETF was rebalanced in line with Google’s strengthened AI full-stack strategy. Recently, Google has established a comprehensive AI full-stack structure, spanning semiconductors (led by its Tensor Processing Unit, or TPU), cloud infrastructure, the Gemini model, and AI services. As a result, Google is now directly competing with the OpenAI camp in software and with the Nvidia ecosystem in hardware. The ETF portfolio was restructured into two core categories: "TPU-based suppliers" and "AI service expansion investees."

In the supplier segment, major companies in the TPU value chain were newly included, centered around Broadcom, along with Celestica, Lumentum Holdings, and TTM Technologies. In the investee segment, based on Google’s 13F disclosure data, companies engaged in strategic investments such as precision medicine AI, AI drug development, and satellite communications were selectively added.

According to the fund evaluation firm FnGuide, this ETF recorded a 53.88% return over the past six months and a 41.48% return over the past year. These results outperformed the benchmark indices for the same periods, which were 31.56% and 18.90%, respectively. Since its listing, the ETF has also posted a net asset increase of 58.4 billion won.

The ACE Nvidia Value Chain Active ETF’s rebalancing reflects Nvidia’s evolution from a simple semiconductor company into an AI infrastructure provider supplying entire data centers. In the supplier segment, TSMC and SK hynix, both essential for GPU production, were included as top holdings, along with Arm Holdings, ASE Technology, Vertiv, and other companies spanning the data center supply chain. In the investee segment, new additions included next-generation cloud companies such as CoreWeave, as well as partners in robotics, AI autonomous driving, and AI drug development-areas Nvidia views as next growth drivers.

The ACE Microsoft Value Chain Active ETF focused on the powerful moat created by the combination of OpenAI and Microsoft. The portfolio was structured into three categories: ▲OpenAI’s largest shareholders (Microsoft and SoftBank) ▲hardware suppliers for OpenAI (high-performance GPU supply chain and next-generation cloud) ▲software suppliers for OpenAI (data licensing and platforms equipped with ChatGPT features). The rebalancing incorporated companies expected to benefit most from OpenAI’s vision for artificial general intelligence (AGI) and the evolution of AI monetization platforms.

Hwang Wootak, Head of Global Equity at Korea Investment Management, stated, "As full-scale competition between AI camps begins, the independent AI full-stack ecosystems of big tech companies are becoming more distinct. This rebalancing proactively reflects the current phase of AI industry segmentation, represented by TPUs, GPUs, OpenAI, and Gemini."

He added, "The ACE Value Chain Active ETF series demonstrates the strengths of active ETFs by swiftly capturing and reflecting the rapidly changing AI industry structure in its portfolios. We will continue to manage these funds flexibly and proactively so that investors can effectively capture AI technology trends and ecosystem changes."

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