by Ryu Hyunseok
Published 24 Jan.2024 10:39(KST)
Updated 24 Jan.2024 14:21(KST)
Kiwoom Asset Management announced on the 24th that its ‘KOSEF Global AI Semiconductor,’ which focuses on global companies related to artificial intelligence (AI) semiconductors, has posted a year-to-date return of 14.12%, ranking first among exchange-traded funds (ETFs) listed on the domestic stock market excluding leveraged and inverse products.
According to the Korea Exchange, ‘KOSEF Global AI Semiconductor’ rose 14.12% from the end of last year through the 23rd. This increase ranks 7th out of a total of 812 ETFs traded on the KOSPI market. Among 720 ETFs that track the underlying index at a 1x multiple, excluding leveraged ETFs (which track twice the daily change of the underlying index) and inverse ETFs (which track the negative daily change of the underlying index), it recorded the highest return.
‘KOSEF Global AI Semiconductor’ is a product that concentrates investment in 15 AI semiconductor-specialized companies listed in the US, Europe, and Korea. It was launched on December 21, last year. As of the 23rd, it is managed with a net asset value (NAV) of 11,599.96 KRW and assets under management (AUM) of 8.7 billion KRW.
The high investment weight of about 60% in three semiconductor companies benefiting from the growth of the global AI market?semiconductor design companies Nvidia and AMD, and semiconductor foundry company TSMC?was a key factor in the performance of ‘KOSEF Global AI Semiconductor.’ On the New York Stock Exchange, Nvidia and AMD rose 24.9% and 14.1%, respectively, through the 22nd this year. TSMC also increased by 8.7% during this period.
‘KOSEF Global AI Semiconductor’ invests 20.5% of its assets in Nvidia. Nvidia is a global leading AI semiconductor company with strong competitiveness in designing graphics processing units (GPUs), which play a central role in AI computing. The fund also allocates 24.3% to AMD, which is pursuing Nvidia by producing high-performance AI semiconductors at a more competitive price. The global foundry company TSMC, which handles the contract manufacturing of AI semiconductors designed by Nvidia and AMD, is also included with an 18.2% allocation.
‘KOSEF Global AI Semiconductor’ also invests broadly in IP companies holding intellectual property for semiconductor design (Cadence, Synopsys), design house companies that bridge design and production (Lattice Semiconductor), and OSAT companies (ASE, AMKOR, HPSP, etc.) that handle packaging, testing, and other post-processing. Compared to Nvidia and AMD, these companies have smaller market capitalizations and have received relatively less market attention. Kiwoom Asset Management explains that as the AI semiconductor industry grows, these small and mid-cap companies are expected to benefit as well, presenting significant latent opportunities.
Jung Sung-in, head of the ETF Marketing Division at Kiwoom Asset Management, said, “Last year, industries related to AI generally benefited from the growing expectations for the blossoming AI market, but this year, a selection process will be in full swing. As market interest is expected to focus on semiconductors, an industry where actual sales and profits will increase due to AI industry growth, KOSEF Global AI Semiconductor, which allows investment in global leading stocks, will be a useful alternative for investors.”
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