Samsung Asset Management, KODEX US Semiconductor MV... "150% Return in 3 Years Since Listing"

Samsung Asset Management announced on the 1st that the ‘KODEX US Semiconductor MV ETF,’ a leading domestic US semiconductor exchange-traded fund (ETF), ranked first among all general ETFs with a 3-year return of 150.5% and a 1-year return of 90.1%. This product invests in representative global semiconductor companies listed in the US and was launched on June 30, 2021.

The 3-year return shows an overwhelming performance with a gap of more than 40 percentage points compared to the second-ranked product. Currently, only four ETFs, including KODEX US Semiconductor MV, show returns of over 100% for three years, all of which are US investment ETFs. Such a difference of more than 40 percentage points in returns among US semiconductor investment ETFs is attributed to the management methods of the underlying indices that these products track.

KODEX US Semiconductor MV, with a scale of 30.6 trillion KRW, tracks the same MV Semiconductor Index as SMH (VanEck Semiconductor ETF), the largest US semiconductor ETF. Based on its excellent return performance, this index has surpassed the Philadelphia Semiconductor Index in the US market and established itself as the ‘standard for semiconductor investment.’

The MV Semiconductor Index is evaluated to have a differentiated methodology that allows holding up to 20% of semiconductor leader companies while allocating 50% weight to promising small and medium-sized enterprises, thus maintaining flexibility to not miss trend changes while holding leading stocks to the maximum extent. Since the semiconductor industry levels up based on technological innovation and leader companies with technological and capital competitiveness drive this innovation, the MV Semiconductor Index’s concentrated investment strategy in leader companies has proven to be the most suitable for semiconductor investment products through its performance.

In fact, the MV Semiconductor Index recorded returns of 49.45% year-to-date, 72.91% for 1 year, 173.12% for 2 years, and 109.43% for 3 years, whereas the Philadelphia Semiconductor Index showed 31.66% year-to-date, 50.59% for 1 year, 128.26% for 2 years, and 72.48% for 3 years. Additionally, the 5-year return shows the MV Semiconductor Index leading by 99.9 percentage points, indicating an increasing gap over time.

According to the index management methodology, NVIDIA, which had an investment weight of only about 7% three years ago, naturally increased to the 20% range from early 2023, contributing significantly to high returns. TSMC, whose position is strengthened as we enter the AI era, has also increased its weight to 13.0%, nearly three times higher than comparable products. The monopolistic EDA (semiconductor design software) companies Synopsys and Cadence are uniquely included in the same product category with weights of 3.0% and 2.7%, respectively. This index management methodology is also considered very useful for preparing for the post-AI semiconductor era.

As the outstanding performance of KODEX US Semiconductor MV became widely known since last year, its net assets have grown 3.6 times from 122.6 billion KRW last year to 565.4 billion KRW currently. Individual investors have also net purchased 214.2 billion KRW this year alone, making it the largest domestic listed semiconductor ETF.

Han Dong-hoon, a manager at Samsung Asset Management, said, “Since this product tracks the MV Semiconductor Index, which can flexibly respond to trends in the semiconductor industry, KODEX US Semiconductor MV will be a good investment product for investors who want to invest long-term in semiconductors, as it can proactively reflect changes in the next-generation semiconductor industry such as ‘post-AI semiconductors.’”