Five Out of Top 10 ETFs Are China-Related
"China's AI Technology Reassessed After DeepSeek Emergence"
The returns of China-related exchange-traded funds (ETFs) are soaring. This is attributed to the rise in the Chinese stock market as Chinese tech companies have regained attention due to the generative AI developed by Chinese AI startup DeepSeek.
According to the Korea Exchange on the 21st, the top-performing ETF from the 20th of last month to the day before was TIGER China Hang Seng Tech Leverage, recording a return of 54.79%. Among the top 10 ETFs by returns, five were China-related ETFs, including KODEX China H Leverage (35.67%) and TIGER China Electric Vehicle Leverage (29.20%).
The rise of these China-related ETFs is due to the rebound in the Chinese stock market. In fact, the Hong Kong Hang Seng Index rose more than 12% this month, and the Hong Kong H-Share Index also jumped over 13%. Recently, expectations for IT tech stocks such as Alibaba and Tencent have been rekindled due to the AI model DeepSeek.
Nam Yong-su, head of ETF operations at Korea Investment Trust Management, explained, "Since the emergence of DeepSeek last month, Chinese AI-related stocks have continued to perform strongly," adding, "Interest in Chinese tech stocks such as AI, semiconductors, and robotics, which had been overshadowed by the US-China conflict, has been revived, and expectations for policy responses related to fiscal stimulus and financial market stabilization measures around the March Two Sessions seem to have played a role."
Lee Jung-hwan, head of ETF operations at Mirae Asset Management, said, "The re-evaluation of China’s AI technology following the emergence of DeepSeek has highlighted the rise of tech companies," adding, "The Chinese government's efforts to strengthen support for tech companies are also having a positive impact." He further noted, "The easing of US-China tensions more than expected has also reduced investors' anxiety, which is considered another factor."
The securities industry expects the Chinese stock market to continue its upward trend. Shin Seung-woong, a researcher at Shinhan Investment Corp., said, "It is true that there has been excessive concentration from a supply and demand perspective in Chinese tech stocks," but added, "Although short-term volatility may increase, the leadership position of AI-driven stocks is expected to continue." He also noted, "There are no special events until the National People's Congress (NPC) convenes on the 5th of next month, so during the roughly two-week gap in economic indicators, the market is free from macroeconomic variables."
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