Investing in the 3 Giants of HBM... ACE AI Semiconductor Focus ETF Shows Soaring Returns

Korea Investment Trust Management announced on the 29th that the ACE AI Semiconductor Focus Exchange-Traded Fund (ETF) has ranked first in returns among domestic semiconductor ETFs since the beginning of the year.

According to the Korea Exchange, the ACE AI Semiconductor Focus ETF has the best year-to-date returns among domestic semiconductor ETFs. The year-to-date return of the ACE AI Semiconductor Focus ETF is 45.74%, surpassing the average return of domestic semiconductor ETFs during the same period, which was 24.47%. The ETF recorded a six-month return of 53.40%.

The ACE AI Semiconductor Focus ETF, launched by Korea Investment Trust Management in October last year, tracks the ‘FnGuide AI Semiconductor Focus Index,’ which is a compressed index of leading domestic semiconductor stocks. This ETF is characterized by its concentrated investment in three companies?SK Hynix, Samsung Electronics, and Hanmi Semiconductor?that hold core technological capabilities and overwhelming market shares in the domestic high-bandwidth memory (HBM) market. HBM is an AI memory essential for AI semiconductors to deliver high performance by enabling rapid processing of large volumes of data.

As of 2023, SK Hynix and Samsung Electronics hold approximately 53% and 38% of the global HBM market share, respectively. Hanmi Semiconductor is the global market leader in thermal compression bonding equipment (TSV TC Bonder), which is essential for HBM manufacturing. Hanmi Semiconductor has been jointly developing with SK Hynix since 2017 and has secured orders worth over 200 billion KRW from SK Hynix, which is expected to benefit both companies. Currently, the weightings of the three stocks in the ACE AI Semiconductor Focus ETF are Hanmi Semiconductor (27.50%), SK Hynix (26.46%), and Samsung Electronics (22.63%).

According to the ‘AI Semiconductor Market Status and Outlook’ report published by the Export-Import Bank of Korea on the 13th, the AI semiconductor market size is expected to grow at an average annual rate of 21.6%, from 41.1 billion USD in 2022 to 133 billion USD in 2028.

Supported by excellent returns, the ACE AI Semiconductor Focus ETF has also shown an increasing trend in net asset value. Currently, the net asset value of the ACE AI Semiconductor Focus ETF stands at 48.1 billion KRW, growing 364.03% since the beginning of this year.

Kim Seung-hyun, ETF Consulting Manager at Korea Investment Trust Management, said, “The ACE AI Semiconductor Focus ETF invests about 75% in the three leading domestic companies that dominate the global market share of HBM, which is essential for AI semiconductor manufacturing, and continues to deliver excellent performance. As the AI semiconductor boom is expected to continue, the ACE AI Semiconductor Focus ETF will be a suitable product for investors seeking to benefit from HBM growth.”

The ACE AI Semiconductor Focus ETF is a performance-distributing product, and past performance does not guarantee future results. Investors should also be aware that principal loss may occur depending on management outcomes.