AI Power Infrastructure and Semiconductor ETFs Lead Korean Market Upswing
AI power infrastructure and semiconductor-related ETFs have recently dominated the South Korean ETF market with outstanding returns. Notably, the 'RISE AI Power Infrastructure' ETF posted a 24.43% return from June 4th to 8th, ranking first, while products based on Samsung Electronics and SK Hynix also placed at the top. Analysts attribute this trend to rising power demands from sectors such as electric vehicles and data centers, forecasting robust mid- to long-term growth prospects for these ETFs.
Conversely, energy futures and defense ETFs faced declines due to expectations around U.S.-Iran negotiations and falling defense stock prices. The total net assets in the ETF sector continue to expand rapidly on the back of a buoyant stock market and anticipation for new leveraged instruments tied to major semiconductor stocks, with the 500 trillion won milestone expected to be surpassed within June. The launch of leveraged products centered on Samsung Electronics and SK Hynix is expected to further accelerate capital inflows.
Benefiting from the AI supply chain, ETF managers are increasing allocations to semiconductor equipment makers like Jusung Engineering, PSK, and Seojin System, either newly including them or raising their weights. However, some experts warn of overheating, reminiscent of past market bubbles, and stress the need for investors to carefully consider returns, portfolio holdings, and management quality when choosing semiconductor ETFs.
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