ETFs Target Samsung Electronics and SK hynix Again as Their Stocks Rebound

Samsung Electronics and SK hynix Rebound to Key Price Levels
Wave of New ETFs Focusing on the Two Stocks
Series of Hybrid ETFs Combining Samsung, SK hynix, and Bonds Listed
Single-Stock Leveraged ETFs Expected as Early as Next Month

After a period of stagnation due to the Middle East war, Samsung Electronics and SK Hynix have regained momentum, with their share prices rebounding to 210,000 won and 1 million won, respectively, and are now driving another upward rally. As a result, the launch of exchange-traded funds (ETFs) focused on these two stocks has continued. In particular, next month, single-stock leveraged ETFs related to these two companies are also set to be launched, drawing strong interest from investors hoping to ride the renewed rally of Samsung Electronics and SK Hynix.

According to the Korea Exchange on April 9, Samsung Electronics closed at 210,500 won on the previous day, up 7.12%, recovering the 210,000-won mark. This is the first time since February 27 that Samsung Electronics has closed above 210,000 won. SK Hynix also surpassed the 1 million won mark for the first time this month, ending the day 12.77% higher at 1,033,000 won.

Record-breaking earnings by Samsung Electronics and news of a ceasefire in the Middle East have fueled the stock price gains for both Samsung Electronics and SK Hynix. On April 7, Samsung Electronics announced that its consolidated operating profit for the first quarter of this year was a provisional 5.72 trillion won, up 755% from the same period last year. Revenue was 13.3 trillion won, an increase of 68.1% compared to the previous year. Both quarterly revenue and operating profit marked all-time highs for the company.

Although Samsung Electronics and SK Hynix had been weighed down by the Middle East war and underwent a period of adjustment, with the announcement of their first quarter earnings, another rally is now anticipated. Against this backdrop, the launch of ETFs focused on these two stocks has continued.

On April 7, Samsung Asset Management newly listed the "KODEX Samsung Electronics SK Hynix Bond Mix 50" ETF. This ETF invests up to 25% each in Samsung Electronics and SK Hynix, for a total of 50% of its assets. The remaining 50% is allocated to high-quality domestic bonds such as government bonds.

Previously, the "RISE Samsung Electronics SK Hynix Bond Mix 50" ETF, launched by KB Asset Management in February, recently surpassed 700 billion won in net assets. This ETF also invests 25% each in Samsung Electronics and SK Hynix for a total 50% equity exposure, with the remaining 50% invested in high-quality bonds such as short-term government bonds.

These ETFs allow investors to benefit from the semiconductor industry rebound, while the 50% bond allocation acts as a buffer during downturns, enabling stable investment. In fact, last month, while Samsung Electronics and SK Hynix fell by 22.77% and 23.94% respectively, the RISE Samsung Electronics SK Hynix Bond Mix 50 ETF declined only 11.76%, demonstrating its buffering effect.

Several similar ETFs are set to be launched in succession. Hana Asset Management is preparing to list the "1Q Semiconductor TOP Bond Mix 50" ETF, while Kiwoom Asset Management is preparing to launch the "KIWOOM Samsung Electronics & SK Hynix Bond Mix 50" ETF.

Next month, single-stock leveraged ETFs are expected to appear, further intensifying investment fever around Samsung Electronics and SK Hynix. On April 2, the Financial Supervisory Service issued an advance notice of a proposed amendment to the "Enforcement Rules of the Financial Investment Business Regulations" regarding single-stock ETFs. According to the amendment, the underlying assets for single-stock ETFs must be stocks listed on the Korea Exchange, with an average market capitalization weighting of at least 10% and an average trading value weighting of at least 5% over the past three months. In addition, the stocks must have an investment-grade credit rating or above from major international credit rating agencies, and the average trading value weighting of domestic equity futures and options must account for at least 1% of the respective derivatives market over the previous three months. Currently, among KOSPI-listed companies, only Samsung Electronics and SK Hynix meet these requirements.

In addition to single-stock leveraged ETFs, inverse and covered call ETFs will also be permitted. Leveraged and inverse ETFs can track up to twice the returns or losses, just like index leveraged ETFs. Covered call ETFs are structured to buy the underlying securities and sell call options on them.

The advance notice period for the amendment runs until April 17. The Financial Supervisory Service will confirm the implementation date after collecting opinions. Thereafter, asset management companies will submit securities registration statements, undergo regulatory review, and launch the products. The industry expects that related products could be launched as early as next month.

This content was produced with the assistance of AI translation services.