Early-Year ETF Returns Show Semiconductor and Power Sectors Smiling

Semiconductor ETFs Highlighted for Undervaluation After Last Year’s Poor Performance
Power Infrastructure ETFs Rise on Trump’s Large-Scale Investment Plans

This year, exchange-traded funds (ETFs) related to artificial intelligence (AI), such as semiconductors and power equipment, have shown high returns. This is interpreted as the undervaluation appeal highlighted due to the poor stock performance of semiconductor stocks last year. Additionally, recent announcements by U.S. President Donald Trump about large-scale investments in AI infrastructure have also boosted the returns of ETFs related to power infrastructure.

According to the Korea Exchange on the 28th, from the end of last year until the 24th of this month, the top-performing ETF was KODEX Semiconductor Leverage, which rose by 39.68%. Following that, TIGER Semiconductor TOP10 Leverage ranked second with a 38.29% increase. Other notable performances include KODEX AI Power Core Equipment (30.41%), HANARO Power Equipment Investment (30.15%), and RISE Global Nuclear Power (27.90%).

All of the top ETF performers this year are related to AI. One reason for the rise in semiconductor-related ETFs is the highlighted undervaluation appeal.

Last year, the stock prices of leading domestic semiconductor companies such as Samsung Electronics and SK Hynix declined, resulting in poor ETF returns. However, this year, the undervaluation appeal has been emphasized, leading to an upward trend. In the case of SK Hynix, its stock price reached as high as 248,500 KRW intraday in July last year but fell to as low as 144,700 KRW intraday in September of the same year. Nevertheless, this year’s growth rate has reached 27.08%.

The outlook for SK Hynix this year is also bright. Securities firms expect both performance and stock price to show positive trends through expanded sales of high-bandwidth memory (HBM), supported by the continuous growth of the AI market this year. According to FnGuide, securities companies forecast SK Hynix’s sales and operating profit for this year to be 83.3843 trillion KRW and 33.5926 trillion KRW, respectively, representing increases of 25.97% and 43.15% compared to the previous year.

The strength of power infrastructure-related stocks is also attributed to President Trump’s investment plans. On the 21st (local time), President Trump announced that OpenAI, Japan’s SoftBank, and Oracle will invest at least 500 billion USD (approximately 720 trillion KRW) in the U.S. to create a new AI company called Stargate. Additionally, Meta revealed plans to invest up to 65 billion USD (approximately 93 trillion KRW) in data centers, showing strong performance amid favorable developments originating from the U.S.

Yuhan Park, a researcher at KB Securities, said, "President Trump has shown a policy stance favorable to AI technology, demonstrating his determination to secure U.S. leadership in the AI technology supremacy competition with China immediately after taking office," adding, "The role of power, which underpins AI data centers, is expected to receive more attention."

In particular, individual investors continue to purchase power infrastructure ETFs. From the 2nd to the 24th of this month, individual investors net bought 10.7 billion KRW worth of KODEX AI Power Core Equipment. This was followed by HANARO Power Equipment Investment (1.17575 billion KRW) and RISE Global Nuclear Power (1.77195 billion KRW).