Rising demand for energy storage systems driven by the spread of artificial intelligence data centers, coupled with expectations for the commercialization of next-generation batteries, has pushed a Shinhan Asset Management exchange-traded fund investing in solid-state battery companies to the top of three-month return rankings.
The SOL Solid-State Battery & Silicon Anode ETF posted a 22.76% return over the three months through Oct. 16, according to the Korea Exchange on the 19th. That was the highest return among domestically listed equity ETFs, excluding leveraged and inverse products. It also exceeded the KOSPI's return of minus 16.90% over the same period by 39.66 percentage points.
The fund's main holdings include next-generation battery companies such as Samsung SDI, LG Energy Solution, EcoPro BM, Isu Specialty Chemical, Lotte Energy Materials and Daejoo Electronic Materials. The product focuses on competitiveness in next-generation technologies such as solid-state batteries and silicon anode materials, rather than short-term shifts in demand in the existing electric vehicle market.
With the recent rally in domestic semiconductor shares losing momentum, secondary battery ETFs have moved into the top tier of returns. Analysts attribute the shift to improved investor sentiment as the battery industry, long weighed down by slowing EV demand, secures a new growth driver centered on ESS.
Growing electricity demand from AI data centers and the expansion of renewable power generation are cited as the main drivers of ESS market growth. LG Energy Solution posted preliminary third-quarter operating profit of 756 billion won ($528 million), beating market expectations. The expansion of its North American ESS business and the conversion of production facilities are seen as supporting the earnings recovery.
Expectations are also building for the commercialization of next-generation battery technology. Samsung SDI is pursuing technology development and cooperation with customers with the goal of mass-producing solid-state batteries in 2027. The government also plans to provide about 400 billion won for next-generation battery research and development over five years starting in 2027. Solid-state batteries replace conventional liquid electrolytes with solid ones to improve safety and energy density, and their applications are expected to expand beyond electric vehicles into areas such as humanoid robots and aerospace.
"The secondary battery industry is securing a new demand base through ESS, and growth drivers are diversifying as the commercialization of next-generation technologies such as solid-state batteries and silicon anode materials comes into view," said Kim Jung-hyun, head of the ETF business group at Shinhan Asset Management. "Going forward, the earnings recovery through ESS and competitiveness in next-generation technologies such as solid-state batteries will be key factors determining corporate value."