Semiconductor-themed exchange-traded fund (ETF) returns are on the rise. Major semiconductor corporations including Nvidia are showing strong earnings as artificial intelligence (AI) data center expansion and demand for high-performance graphics processing units (GPUs) grow. As global geopolitical conditions stabilize, uncertainty in global supply chains is easing and retail buying is flowing in, and expectations for a recovery in the memory cycle, tied to expanding AI infrastructure demand, appear to have had a positive impact on the market.
The representative semiconductor-themed ETF, "ACE Global Semiconductor TOP4 Plus SOLACTIVE ETF," is regarded as a product that reflects the current of the semiconductor industry leading the global market. First launched in Nov. 2022, it invests with about a 20% concentration in top corporations across four areas in the semiconductor industry: memory, non-memory, foundry, and semiconductors. It invests in selected corporations while allowing diversification by sector, enabling risk dispersion.
According to the Korea Exchange on the 26th, as of the 24th, the fund's cumulative return since listing was 276.12%, with the current price in the 30,000-won range. The six-month return is 43.80% and the one-year return is 59.68%, showing an upward trend, and the net asset size was tallied at 406 billion won.
This performance is the result of improved investor sentiment due to easing global volatility and favorable internal and external conditions, including heightened expectations for Nvidia's second-half earnings. In particular, raising the weighting of SK hynix is seen as having been effective.
The No. 1 corporations by sector included in the ETF are stocks that directly benefit from growth in the AI semiconductor industry. As they continue to hold a sustained competitive edge in the market, they can effectively reflect trends in the AI semiconductor market. The current portfolio weights are SK hynix (20.85%), TSMC (20.85%), ASML (20.60%), and Nvidia (18.72%). A strategy of investing in representative corporations by area can reduce the impact of volatility and support stable performance for long-term investing.
Nam Yong-su, head of ETF management at Korea Investment Management, said, "As global competition to develop AI technology intensifies and the industry grows, growth will continue to center on the No. 1 corporations with unrivaled technology in each field," adding, "Semiconductors are a sector that must be included in a long-term investment portfolio."
He added, "We recommend using retirement pension accounts such as defined contribution (DC) and individual retirement pensions (IRP), as well as individual savings accounts (ISA), to make long-term investments in the semiconductor industry, which is drawing attention for its future growth potential."
However, ETFs are performance-based products, and past performance hardly guarantees future results. Depending on management outcomes, principal loss may occur.