Samsung, SK hynix gain bigger weight in ETFs

South Korean asset managers are launching more semiconductor-themed ETFs and increasing exposure to Samsung Electronics and SK hynix.

The move comes as strong AI chip demand fuels a KOSPI rally and increases market concentration in the two stocks.

Samsung Asset Management, a South Korean fund manager, raised the cap for each company in its KODEX AI Semiconductor ETF to 25% from about 20%.

It also cut the number of holdings to about 15 from 24.

Data from ETF Check showed 391 of 1,107 local ETFs held Samsung Electronics, while 386 held SK hynix.

Among Samsung-linked funds, 59 allocated more than 30% of their assets to the stock.

Planned single-stock leveraged ETFs tied to the chipmakers have also raised concerns that weaker semiconductor sentiment could increase market volatility.

🔗 Source: The Korea Times

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Implications, context, and why it matters.

Regulators are opening the door to more concentrated risk

South Korea’s Cabinet approved rule changes for single-stock leveraged and inverse ETFs. The first funds could arrive in late May, with May 22 possible if filings clear and the exchange signs off 1.
At first, only Samsung Electronics and SK hynix qualify. Eight firms have filed disclosures for 16 leveraged and inverse ETFs tied to those two stocks, with listings aimed for May 27 2.
The products will be capped at 2x leverage. Officials moved ahead in part because retail traders were already using similar high-risk tools in overseas markets such as Hong Kong 3.
Safeguards include a one-hour advanced training course plus a minimum deposit of 10 million won (US$7,200) 1.

New retail trading tools may add to market swings

Regulators and analysts have warned that the KOSPI already relies heavily on large tech names, especially Samsung Electronics and SK hynix. That leaves the benchmark exposed to sharp moves 4.
Giving traders magnified ways to bet on the market’s two biggest companies could send bigger price swings through the broader stock market 5.
That could increase the need for support measures, including a 100 trillion won (US$72 billion) market stabilization plan available if needed, to calm turbulence linked to these rules 4.