Battery ETFs take eight of top 10 return spots in South Korea as chip stocks pause

Exchange-traded funds holding South Korean secondary-battery stocks took eight of the top 10 spots by return among domestically listed ETFs from Oct. 1 to 8, according to Korea Exchange data reported by Yonhap, Kyunghyang Shinmun and Seoul Shinmun on Oct. 9. Yonhap and Seoul Shinmun also cited Koscom's ETF CHECK service. The outlets said the gains came while large-cap semiconductor stocks paused. [ 1 , 2 , 3 ]

A leveraged secondary-battery industry fund, KODEX 2차전지산업레버리지, led with a 19.94% gain, followed by TIGER 2차전지TOP10레버리지 at 18.45%. Two solid-state battery funds, SOL 전고체배터리&실리콘음극재 (13.48%) and KODEX 전고체배터리ESS TOP2플러스 (13.44%), ranked third and fourth. BNK2차전지양극재 (11.22%), KODEX 2차전지산업 (10.68%), SOL 2차전지소부장fn (10.47%) and TIGER 2차전지소재fn (10.26%) ranked sixth, eighth, ninth and tenth. The outlets described solid-state batteries as batteries whose electrolyte is solid rather than liquid and said their commercialisation is expected next year. [ 1 , 2 , 3 ]

The outlets attributed the rally to demand for energy storage systems (ESS) from the expansion of AI data centres, which they said is being reflected in battery companies' earnings. LG Energy Solution, described as the sector's leading stock, disclosed on Oct. 8 a provisional consolidated third-quarter operating profit of 756 billion won, up 25.7% from a year earlier and 567.3% from the previous quarter, with record quarterly revenue. The KRX K-AI 2차전지 index rose 10.79% this month, the highest among Korea Exchange thematic indices and more than double the 4.88% rise of the KRX AI semiconductor index. [ 1 , 2 , 3 ]

Kim Gwi-yeon (김귀연), an analyst at Daishin Securities, said share-price momentum from improved ESS sales and profitability next year remains valid, following order momentum at the end of this year. Yonhap and Seoul Shinmun reported that Kim maintained an 'overweight' rating on the sector. Nam Yong-su (남용수), head of the ETF division at Korea Investment Management (한국투자신탁운용), said the link between ESS and AI data centres had raised growth expectations. Nam said the ESS-led recovery is expected to continue, but that share prices are moving from growth expectations to an earnings-verification stage, so ESS supply contracts and mass-production capacity need to be checked. [ 1 , 2 , 3 ]

Yonhap reported that the Kosdaq rose 4.25% from Oct. 1 to 8 while the Kospi fell 3.10%, and that Kosdaq 150 leveraged ETFs gained close to 10%, including TIGER 코스닥150 레버리지 (9.92%) and KODEX 코스닥150레버리지 (9.66%). Han Ji-young (한지영) of Kiwoom Securities said flows rotated into Kosdaq small and mid-caps while large caps such as semiconductors found support, with chip materials, parts and equipment, secondary battery and bio stocks strong on the Kosdaq. [ 1 ]

Yonhap also reported that retail investors bet on a Kosdaq decline this month. They net sold 4.6 billion won of TIGER 코스닥150레버리지 while net buying 180 million won of TIGER 코스닥150선물인버스, and net sold 116.3 billion won of KODEX 코스닥150레버리지 while net buying 1.7 billion won of KODEX 코스닥150선물인버스. [ 1 ]