Samsung Asset Management "KODEX US Semiconductor MV, Individual Investors' Largest Net Purchase of 13.5 Billion This Year"

Samsung Asset Management announced on the 29th that as of the 26th of this month, the net purchase by individuals of the ‘KODEX US Semiconductor MV ETF’ since the beginning of the year reached 13.5 billion KRW, making it the largest among domestically listed semiconductor exchange-traded funds (ETFs).

Driven by positive outlooks on the artificial intelligence (AI) industry, investment demand has been concentrated on AI semiconductor companies, which are core to the AI infrastructure sector, since the end of last year. The market dominance of Nvidia, a representative AI semiconductor company, has expanded, and since last year, the proportion of Nvidia within ETFs has been a key factor determining product performance differences.

In fact, KODEX US Semiconductor MV has the highest Nvidia investment ratio among domestically listed general semiconductor ETFs at 22%. It recorded a 73.6% return over the past year, ranking first. This ETF comprehensively invests across the semiconductor industry, including fabless, foundry, memory companies listed in the US, as well as semiconductor design software and equipment, and next-generation power semiconductors.

It includes 25 global major semiconductor companies. Investments are made in Nvidia (22%), TSMC (9%), Broadcom (6%), AMD (6%), ASML (5%), with a relatively high proportion in AI semiconductor-related companies. Additionally, about 50% is allocated to other stocks outside the top group to maintain a balanced portfolio that does not miss the growth potential of excellent companies with high potential.

The underlying index of KODEX US Semiconductor MV, known as the Korean version of the VanEck Semiconductor ETF (SMH), is the ‘MV Semiconductor Index.’ This index is the same as SMH, the largest US semiconductor ETF with a scale of approximately 18 trillion KRW.

In 2021, SMH, which tracks the MV Semiconductor Index, surpassed the iShares Semiconductor ETF (SOXX), which tracks the ICE Semiconductor Index, to become the world’s largest semiconductor ETF, showing a significant size difference compared to the ‘Invesco PHLX Semiconductor ETF (SOXQ),’ which tracks the Philadelphia Semiconductor Index.

The growth of SMH as a representative US semiconductor ETF is attributed to the advantages of its underlying index, the ‘MV Semiconductor Index.’ Unlike some semiconductor indices with a maximum investment limit of 8% per stock, it can intensively include leading companies with about a 20% weighting, allowing concentrated investment in industry-leading companies. Three years ago, Nvidia’s weighting was in the 7% range, but thanks to this methodology, it has risen to the 20% range, reflecting changes in the semiconductor industry most accurately.

Han Dong-hoon, a manager at Samsung Asset Management, said, “Just as the SMH ETF is regarded as the global standard for semiconductor investment in the US based on its excellent returns, the KODEX US Semiconductor MV ETF has also achieved outstanding performance,” adding, “It is receiving a good response from investors considering US semiconductor investments.” He continued, “It will be a good investment product for investors who want to proactively invest not only in current core AI semiconductor companies but also in future ‘post-AI semiconductor companies.’”