Seeking Profits
Individual investors poured tens of billions of won into exchange traded funds (ETFs) on Korean semiconductor companies that are expected to hit lows and rebound in the second quarter while selling off U.S. semiconductor ETFs to realize profits.
According to fund evaluator FnGuide on May 7, individual investors net-sold 33.5 billion won (US$25.3 million) worth of the TIGER U.S. Philadelphia Semiconductor NASDAQ ETF in from April 3 through May 3. The ETF invests in 30 major U.S. semiconductor companies, including Nvidia and AMD. With net assets of more than 1.5 trillion won (US$1.1 billion), it is the largest listed semiconductor ETF in Korea. During the same period, about 1.6 billion won (US$1.2 million) in personal funds flowed out of KODEX US Semiconductor MV.
While individual investors are pulling money out of stocks of U.S. semiconductor companies, they are pouring tens of billions of won into Korean semiconductor ETFs. Individuals have been net buyers of the TIGER Fn Semiconductor TOP10 ETF worth 18.1 billion won (US$13.7 million) in the past month. The ETF invests in 10 leading Korean semiconductor companies, with Samsung Electronics and SK hynix accounting for more than 50 percent of the total. During the same period, KODEX Semiconductor and KBSTAR Non-Memory Semiconductor Active also attracted net purchases of 11.3 billion won (US$8.54 million) and 1.4 billion won (US$1.1 million), respectively.
Insiders of the Korean financial investment industry believe that the perception that the memory semiconductor industry will hit a low and rebound after Samsung Electronics’ announcement of a semiconductor production cut is expanding among individual investors, fueling their interest in buying related ETFs. On the other hand, analysts say that U.S. semiconductor ETFs, which soared since the beginning of the year due to a ChatGPT craze, are being sold to realize profits. In fact, the TIGER U.S. Philadelphia Semiconductor NASDAQ ETF is up 26.42 percent since the beginning of the year, outperforming the KOSPI (11.85 percent) over the same period.