AI ETFs Triple in Korea in One Year, Outperformance and Policy Fuel Asset-Manager Arms Race

AI ETFs Triple in a Year: What Executives Need to Do Next

AI-focused ETFs in Korea have surged from 2.4 trillion won to 7.5 trillion won in a year-more than triple the size, with returns beating the ETF market by a wide margin. Policy momentum, improving GPU supply, and broad AI adoption across semiconductors, data centers, cloud, robotics, and healthcare are pulling in capital. Managers are accelerating product launches, and competition is intensifying.

Key numbers at a glance

• Total net assets (ETFs with "AI" in the name): 7.4898 trillion won as of Sept 17, up 216.8% from 2.3639 trillion won a year ago.
• Market context: Total ETF assets grew 60.4% (151 trillion won to 242 trillion won) in the same period.
• Performance: 3-month average return 20.4% vs market average 11.1%; 6-month 30.6%; 1-year 45.4%.
• Provider growth: From 8 managers offering 14 AI ETFs (Sept 2023) to 17 managers with 55 today.
• Leaders by AUM: Samsung AM 2.7667 trillion won; Mirae Asset 2.0069 trillion won; Shinhan AM 895.2 billion won; Timefolio 849.9 billion won.
• Small/mid firms are competitive: Among top 10 one-month performers, over half came from mid-tier or smaller managers.

Top recent performers (one-month)

• TIMEFOLIO China AI Tech Active: 20.2%
• PLUS China AI Tech TOP10 (Hanwha AM): 18.0%
• ACE China AI Big Tech TOP2+ Active (Korea Investment Trust): 16.4%
• ITF K-AI Semiconductor Core Tech (IBK AM): 14.0%
• BNK On-Device AI (BNK AM): 12.3%
• KIWOOM Medical AI (Kiwoom AM): 11.3%

Why capital is moving

AI is now a core driver across the tech stack-chips, infrastructure, cloud services, automation, and healthcare. Mega-cap leaders have rerated over two years: Nvidia (+287.9%), Microsoft (+54.5%), Alphabet (+80.7%), AMD (+56.8%).

Analysts project scale to build. One forecast pegs the AI market at USD 757.6 billion in 2025, reaching USD 3.68 trillion by 2034 (19.2% CAGR). Source.

Policy tailwinds in Korea

The government plans to commit 150 trillion won over five years via a National Growth Fund to advance 10 strategic sectors, including AI and semiconductors. Priorities include stronger GPU supply and broader AI deployment across industries. The K-AI Project aims to develop domestic foundation models ("sovereign AI"), which is lifting sentiment and product activity-especially in software-focused exposures.

New product launches to watch

• Shinhan AM: SOL Korea AI Software (lists Sept 23) - AI software names.
• KB AM: RISE AI Power Infrastructure (lists Sept 23) - domestic AI-related power companies.
• Kiwoom AM: KIWOOM U.S. High Dividend & AI Tech (lists Sept 23) - high dividend plus top U.S. AI tech stocks.
• Hana AM: 1Q K-Sovereign AI (lists Sept 30) - Naver, Kakao, Samsung SDS, LG CNS, and peers.
• Samsung AM: Preparing an ETF tied to the KRX Sovereign AI Index (expected this month). KRX

What this means for executives and strategy

• Capital allocation: Revisit policy portfolios. Decide the role of AI-themed ETFs vs core beta. Phase entries; use rebalancing rules to control timing risk.
• Product and distribution: If you're an issuer, assess gaps in software, data center infrastructure, and cross-border exposures. Speed matters, but index quality and liquidity come first.
• Partnerships: Secure data center and GPU supply ties where relevant. Explore co-branded indices with credible data partners.
• Talent and research: Build internal AI and semi research coverage to avoid single-name concentration risk. Track index methodology drift.
• Governance: Set position limits for highly correlated chip names; monitor factor tilts (momentum, quality, size) and stress scenarios.

Risk signals to monitor

• Valuation and earnings delivery: High expectations leave little room for misses.
• Policy execution: Funding timelines, procurement of GPUs, and sovereign model progress.
• Index construction: Overlap across AI ETFs, theme purity, and reconstitution rules.
• Liquidity: On-screen depth, spreads, and creation/redemption capacity under stress.
• Geopolitics and supply chain: Export controls, China exposure, and vendor concentration.
• FX exposure: USD/KRW swings affecting U.S.-linked AI products.

Ninety-day action plan

• Audit exposure: Map current holdings across AI themes; quantify overlap and factor bias.
• Clarify thesis: Choose which AI value chains you want-chips, infrastructure, software, healthcare.
• Select vehicles: Mix broad AI indices with targeted satellites (semis, data centers, on-device, medical AI).
• Set guardrails: Entry bands, max position sizes, and pre-set rebalance rules tied to valuations and flows.
• Communicate: Align PMs, risk, and IR on narrative, metrics, and client education.

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Source

Market data cited from the Korea Exchange. Korea Exchange