On Hopes for an End to the War... Power and Semiconductors Soar, While Crude Oil and Defense Falter [ETF Square]

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[Financial News] In South Korea's exchange-traded fund (ETF) market, stocks tied to artificial intelligence (AI) power infrastructure and semiconductors showed strength. According to the Korea Exchange (KRX) on the 10th, the top-performing domestic ETF from April 4 to 8 was RISE AI Electricity Infrastructure, which rose 24.43%. Over the same period, KODEX AI Electric Power Core Facilities (23.40%), KODEX AI Electric Power Core Facilities (20.57%), and RISE Large Cap High Dividend 10 TR ETF (20.24%) also ranked near the top. The figures exclude leveraged and inverse products, as well as funds with average daily trading volume below 100,000 shares.
AI-related themes also led the ETF market last week. Six of the top 10 performers were ETFs linked to AI, power, and semiconductors. In particular, power infrastructure ETFs have continued to gain ground as demand for electricity infrastructure rises. RISE AI Electricity Infrastructure, KODEX AI Electric Power Core Facilities, TIGER Korea AI Electrical Power Equipment TOP3 Plus, and NH-Amundi HANARO Electric Power Capex ETF remained among the leaders, extending their strength from the previous week.
Jeong Yeon-woo, a researcher at NH Investment & Securities, said, "As electrification and AI investment expand, power demand centered on data centers and advanced industries is rising rapidly." He added, "This structural increase in demand will serve as a long-term growth driver for power-related sectors."
Still, some analysts pointed to concerns over the recent sharp rally. Lee Sang-hyun, a researcher at Meritz Securities, said, "Power infrastructure ETFs have been rising on higher guidance for Big Tech AI infrastructure investment and momentum from order backlogs," but added, "In the short term, the market has entered a phase that requires both trend-following and overheating management."
Semiconductor blue chips such as Samsung Electronics and SK hynix also lifted related ETFs. PLUS Global HBM Semiconductor ETF and SOL AI Semiconductor TOP2 Plus ETF were among the top performers. Park Woo-yeol, a researcher at Shinhan Investment & Securities, said, "As funds flow into ETFs on the back of semiconductor strength, the risk of concentration has become even greater."
On the other hand, crude oil futures ETFs were among the biggest losers. KODEX WTI Crude Oil Futures ETF (-13.7%), TIGER Crude Oil Futures Enhanced (H) (-12.9%), and Kiwoom US Oil & Energy Companies ETF (-7.2%) all declined. Expectations surrounding talks between the United States and the Islamic Republic of Iran, along with moves toward higher oil production, weighed on oil-related ETFs across the board.
Defense stocks also fell broadly. KODEX Defense TOP10 (-7.5%), Hanwha PLUS K-Defense ETF (-7.6%), and TIGER K-Defense Industry & Space ETF (-7.9%) were concentrated near the bottom of the rankings. Analysts said hopes for a ceasefire and negotiations weakened momentum in defense stocks and triggered profit-taking.
However, the pullback in defense stocks is expected to remain limited. Tensions between Russia and Ukraine are still unresolved, and demand for stockpiling and new orders to replenish military strength is likely to continue. In addition, South Korea's defense earnings and order intake this year are expected to follow a clear back-loaded pattern, with most mass-production delivery schedules concentrated in the second half.
Baek Jong-min, a researcher at Yuanta Securities Korea Co., Ltd., said, "The defense sector is likely to see rising emergency demand," adding that "an environment is taking shape in which the strengths of K-defense industry can stand out."
fair@fnnews.com Han Young-joon Reporter