Expectations for an improving semiconductor cycle have pushed returns sharply higher for chip-related exchange-traded funds in South Korea, with leveraged products far outpacing standard funds.
According to Koscom's ETF CHECK data released on the 26th, Samsung Asset Management's KODEX Semiconductor ETF returned 95.10% year to date. Its six-month return was 112.20%, and its one-year return rose to 300.85%.
Mirae Asset Global Investments' TIGER Semiconductor TOP10 ETF showed a similar pattern, posting returns of 90.03% year to date, 112.07% over six months and 304.39% over one year.
Leveraged ETFs magnified those gains. The KODEX Semiconductor Leveraged ETF returned 215.21% year to date, more than double the non-leveraged KODEX fund. Its six-month return was 261.55%, and its one-year return reached 1,115.98%. The TIGER Semiconductor TOP10 Leveraged ETF returned 201.60% year to date, 259.90% over six months and 1,141.10% over one year.
Even when tracking the same semiconductor index, leveraged ETFs apply a multiple to daily returns. If an index keeps rising, compounding can widen performance gaps beyond a simple two-times effect, potentially reaching three to four times over longer periods.
Regulatory changes are also lifting expectations. With listings now allowed for leveraged ETFs using Samsung Electronics and SK hynix as underlying assets, about 10 products are expected to launch next month, led by major asset managers. The move is expected to help capture domestic demand that has been directed to overseas markets, where single-stock leveraged ETFs already trade.
Kim In-sik, a researcher at IBK Investment & Securities, said demand is likely to flow first into products linked to expectations for the semiconductor cycle and earnings momentum centered on Samsung Electronics and SK hynix.
Still, leveraged ETFs can amplify losses in down markets. Price gaps between a fund's intrinsic value and its market price can also be wider than for standard ETFs, underscoring the need for investors to review risks before investing.
* This article has been translated by AI.
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