KB Asset Management is launching an actively managed exchange-traded fund that picks the fastest-growing names among South Korean makers of semiconductor materials, components and equipment.
The firm said the RISE Semiconductor Materials, Parts and Equipment Active ETF would begin trading on the 20th. Because the benefits of rising artificial intelligence investment are uneven across the supply chain, the fund adjusts its weightings based on an analysis of sector trends and individual company competitiveness.
Its main holdings are Samsung Electro-Mechanics at 8.37%, Giga Vis at 8.01%, Simmtech at 7.83%, Tes at 7.51%, Psk Holdings at 7.27%, HPSP at 7.23%, PSK at 7.16%, Isu Petasys at 5.84%, LEENO Industrial at 5.08% and Eugene Technology at 4.72%. The total fee is 0.63% a year, and distributions are paid on the last business day of January, April, July and October.
The semiconductor supply chain spans front-end and back-end equipment, substrates, packaging and testing, materials and components. Because earnings and share prices vary by segment depending on memory makers' capital spending and foundry orders, the fund focuses on selecting the sectors and companies expected to benefit rather than investing evenly across the industry.
It is paying particular attention to the possibility that rising demand for AI servers and higher memory prices will drive manufacturers to expand capital spending. According to KB Asset Management, spot prices for DDR5 DRAM have risen about 590% from October last year, while spot prices for NAND flash have climbed about 360% since January this year. If memory makers expand production capacity, demand for related equipment, materials and components should increase, the firm said.
Researchers specializing in the semiconductor supply chain will analyze the industry and individual companies alongside the active ETF management team, the private equity team and small- and mid-cap portfolio managers. Based on that work, the fund will set sector weightings and adjust the portfolio to reflect major events such as order wins at individual companies.
"Investment opportunities in the semiconductor materials, parts and equipment market can shift depending on sector earnings and order conditions at each company," said Yook Dong-hwi, head of ETF product marketing at KB Asset Management. "We plan to respond to market changes by adjusting weightings and holdings based on sector trends and the competitiveness of individual companies."