Samsung-SK hynix concentration weakens ETF diversification

Asset management firms are accelerating the launch of semiconductor-themed exchange-traded funds (ETFs) while aggressively increasing exposure to the country’s two largest chipmakers, Samsung Electronics and SK hynix, amid the recent KOSPI rally driven largely by optimism over soaring global demand for artificial intelligence (AI) chips, industry officials and market analysts said Monday. The trend is fueling concerns that ETFs, originally intended to provide diversified investment exposure, are becoming increasingly concentrated in the two tech giants. Market watchers warned that excessive reliance on semiconductor stocks could amplify volatility in the broader domestic equity market. Samsung Asset Management recently revamped its “KODEX AI Semiconductor” ETF by increasing the maximum weighting of Samsung Electronics and SK hynix to 25 percent each. The previous cap for individual holdings had been around 20 percent. The asset manager also streamlined the portfolio by reducing the number of constituent stocks from 24 to about 15. Data from ETF Check, a platform operated by Korea S

Original source: Korea Times