Major semiconductor companies such as Nvidia are posting strong earnings, driven by the expansion of artificial intelligence (AI) data centers and rising demand for high-performance graphics processing units (GPUs). This is fueling the upward trend in returns for semiconductor-themed exchange-traded funds (ETFs). As global geopolitical stability reduces supply chain uncertainties, individual investors are also increasing their buying activity. Expectations for an improved memory market, alongside growing demand for AI infrastructure, are seen as having a positive impact on the market.
According to Koscom ETF Check on July 2, the 'ACE Global Semiconductor TOP4 Plus SOLACTIVE ETF' has recorded a cumulative return of 207.71% since its listing, based on the closing price as of June 30. The three-month return stands at 26.79%, maintaining an upward trend. The six-month and one-year returns were 15.70% and 14.34%, respectively. The net asset value has been tallied at 322.4 billion won.
Launched in November 2022, the ACE Global Semiconductor TOP4 Plus SOLACTIVE ETF is considered a product that effectively reflects the trends of the global semiconductor industry. It focuses approximately 20% of its investments on each of the top companies leading the global semiconductor market. While investing in selected companies, the ETF also enables sectoral diversification, helping to spread risk.
Improved investor sentiment following news of a ceasefire between Israel and Iran, as well as Nvidia's strong earnings, have influenced investment sentiment. With favorable domestic and international conditions, SK hynix shares have been hitting new all-time highs for consecutive days, which has driven ETF returns higher as well.
The top companies in each sector included in the ETF are expected to benefit directly from the growth of the AI semiconductor industry. Because these leading companies hold a competitive edge in the market, they can effectively capture trends in the AI semiconductor sector and are expected to deliver strong performance. The current portfolio allocation is as follows: ▲SK hynix (24.17%) ▲TSMC (20.85%) ▲Nvidia (19.97%) ▲ASML (16.76%).
Nam Yongsoo, Head of ETF Management at Korea Investment Management, stated, "As global competition in AI technology development intensifies and the industry grows, the semiconductor sector will see growth led by top companies with unrivaled technological capabilities in each of the four areas: memory, non-memory, foundry, and semiconductors."
He added, "Semiconductors are a sector that must be included in any long-term investment portfolio," and emphasized, "I recommend long-term investment in the semiconductor industry, which has promising future growth prospects, by utilizing retirement pension accounts such as defined contribution (DC) plans, individual retirement pension (IRP) accounts, and individual savings accounts (ISA)."
ETF products are performance-based and past performance does not guarantee future results. Principal loss may occur depending on management outcomes.
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