In the domestic stock market, the concentration on Samsung Electronics and SK hynix has intensified, expanding the share of trading volume the two stocks account for on the main board. As the index keeps rising on the back of the "semiconductor top two," semiconductor-related products are also sweeping returns in the exchange-traded fund (ETF) market.
According to the Korea Exchange (KRX) on the 21st, the average daily trading volume on the main board so far this month came to 514.27 million shares. That is down 26.41% from last month's daily average of 698.79 million shares, and as marketwide trading declined, trading volumes for Samsung Electronics and SK hynix also fell.
However, the share of trading volume taken by the two stocks actually grew. That is because the drop in the two stocks' trading volumes was smaller than the overall decline on the main board. Samsung Electronics' share of trading volume rose to 6.24% this month from 4.95% last month. SK hynix also increased to 1.04% from 0.89%.
This is seen as the result of funds concentrating on large-cap semiconductor stocks recently. As trading flocked to Samsung Electronics and SK hynix, the trading shares of preferred stocks or large caps holding equity in the two stocks also increased together.
In the case of Samsung Electronics preferred shares, Samsung Electronics P, the average daily trading volume share increased to 1.14% this month from 0.88% last month. Samsung Life Insurance and Samsung C&T, which hold equity in Samsung Electronics, also expanded to 0.11% from 0.08% and to 0.15% from 0.12% over the same period. SK Square, which holds equity in SK hynix, also grew to 0.21% from 0.15%.
As trading flocked to large-cap semiconductor names, the trading volume share of non-semiconductor large-cap KOSPI stocks also shrank. Notably, Hyundai Motor's average daily trading share fell to 0.29% this month from 0.37% last month.
Some also say that volatility has increased as trading concentrates on certain stocks. Because Samsung Electronics, SK hynix, and related names account for an overwhelming share of market capitalization on the main board, the index is more likely to swing sharply depending on their moves. In fact, the combined KOSPI market-cap share of Samsung Electronics, SK hynix, SK Square, Samsung Electronics P, Samsung Life Insurance, and Samsung C&T reaches 62.57%.
Han Ji-young, an analyst at Kiwoom Securities, said, "The strategy to raise semiconductor weightings is reasonable because there are few alternative sectors with earnings and valuation appeal comparable to semiconductors," but added, "In the short term, we judge that the burden from concentration and the pressure to take profits has increased after the KOSPI surged more than 10% last week."
In the ETF market, the return gap between semiconductor products and non-semiconductor products is also clear. Semiconductor-related products are monopolizing the top tier of returns.
According to the Korea Exchange (KRX), from the 1st to the 19th of this month, ETFs ranked No. 1 to No. 14 by return were all semiconductor-related ETFs. No. 1 was "TIGER SK hynix Single-Stock Leverage," with a return of 31.22%. In addition, SK hynix single-stock leveraged products swept the No. 1 to No. 7 spots, including "KODEX SK hynix Single-Stock Leverage" (31.13%) and "ACE SK hynix Single-Stock Leverage" (29.71%).
Inflow into semiconductor ETFs is also continuing. According to Koscom ETF CHECK, over the past week (the 12th to the 18th), "KODEX SK hynix Single-Stock Leverage" saw a net inflow of 247.7 billion won. It drew the second-most funds after the flagship domestic ETF "KODEX 200" (681.3 billion won).
By contrast, ETFs holding U.S. space tech and secondary battery-related stocks posted discouraging scorecards. "TIGER U.S. Space Tech" recorded a loss rate of 39.18% this month. Related ETFs saw heavy losses, including "SOL U.S. Aerospace TOP10" (-30.97%) and "KODEX U.S. Aerospace" (-24.38%).
Other non-semiconductor ETFs also posted negative returns, including "TIGER Secondary Battery TOP10 Leverage" (-33.33%), "KODEX Secondary Battery Industry Leverage" (-31.91%), "TIGER LG Group Plus" (-23.15%), and "1Q K Sovereign AI" (-19.48%).
Yeom Dong-chan, an analyst at Korea Investment & Securities Co., analyzed, "Looking at recent average premiums/discounts, semiconductor and information technology (IT) ETFs show high positive premiums, while KOSDAQ and high-dividend ETFs show high negative premiums," adding, "Premiums are more related to investor preference than fundamentals, and we can still confirm that individuals prefer the semiconductor sector."
A positive premium means an ETF's market prices exceed its net asset value (NAV).