Recently, the stock market has shown a theme rotation rally moving from semiconductors to shipbuilding and defense, then to robots. In this trend, asset management companies are pushing aggressive marketing by putting theme exchange-traded funds (ETFs) centered on industries or stocks with surging share prices at the forefront. Some say ETFs broaden investor choices in a high-risk rotation phase, but others note they also intensify money flows into specific themes, increasing volatility.
On the 20th, according to Shinhan Asset Management, the "SOL Automobile TOP3 Plus" ETF broke through a 35% return in just three weeks since the start of the year. The ETF is a product that concentrates on core affiliates of Hyundai Motor Group, investing about 76% in three stocks—Hyundai Motor (27.59%), Hyundai Mobis (24.06%), and Kia (24.74%). Buoyed by recent popularity, the ETF drew in 37 billion won last week (13–19). It ranked 38th among all ETFs by net inflows.
The "TIGER Hyundai Motor Group + Fundamental" ETF, with more than 70% exposure to Hyundai Motor Group stocks, also drew 109.4 billion won last week, ranking 10th among all ETFs by net inflows. The robot-theme "KODEX Robot Active" (holding Neuromeka, Rainbow Robotics, etc.) likewise attracted 62.7 billion won, placing 25th in inflow rankings.
As theme-driven rotations continue in the recent market, investors are actively investing not only in individual stocks but also through ETFs. In fact, earlier this month, semiconductor stocks such as Samsung Electronics and SK hynix led the market higher before momentum shifted to shipbuilding and defense, and then the pattern repeated with semiconductors and autos strengthening together again.
With a rotation rally in which momentum quickly moves from semiconductors to shipbuilding and defense, then back to autos, investors are actively using theme ETFs as an alternative to individual stocks. Asset managers, seizing the moment, are also stepping up their marketing.
On the 6th, Hanwha Asset Management promoted that the "PLUS Aerospace & UAM" ETF posted a one-month return north of 35%. Mirae Asset Global Investments also said on the 12th that the "TIGER K-Defense & Space" ETF recorded an average return of 27.9% last year. These products drew 45.4 billion won and 15.7 billion won, respectively, underscoring the theme boom.
However, the market also warns that the spread of such theme ETFs could amplify the breadth of rotation by fueling money concentration into certain themes. In an overheated phase where investors show "FOMO," ETFs provide a relatively low entry barrier, which could pull into specific themes funds that previously would not have gone into individual stocks. In that case, it is hard to rule out the possibility that price swings driven by skewed supply-demand become abnormally large compared with usual.
On the other hand, considering the inherent diversification of ETFs, there is a strong counterargument that they can still be a useful risk management tool for retail investors in a volatile market. An official at a financial investment firm said, "Theme ETFs can lead to money concentration, but ETFs themselves are a tool that improves investment accessibility," adding, "If you invest with volatility in mind, they can also play a positive role."