The Artificial Intelligence (AI) boom is intensely heating up South Korea's Exchange-Traded Fund (ETF) market. As the AI industry expands, investment trends are rapidly evolving, leading to a steady stream of new product launches. Fueled by strong capital inflows and high performance, the related ETF market has now surpassed 10 trillion KRW (approximately $7.5 billion USD).
Explosive Growth in AI ETFs
According to the Korea Exchange, as of November 4, 2025, the total net assets of the 64 domestically listed AI-themed ETFs reached 11.3946 trillion KRW. This market size has grown by more than 7 trillion KRW in just six months from the approximately 4.3 trillion KRW recorded in early May. During this period, 17 new products were added to the lineup.
Expectations for the AI industry's long-term growth are driving this surge, with returns showing a clear upward trend. The average return over the past year for the 42 AI ETFs listed for more than one year is a staggering 60.04%. The overall average return for AI-themed ETFs over the last month exceeded 10%.
The top performers recently have been ETFs related to power equipment—key infrastructure for AI data centers—such as 'KODEX AI Power Core Facility' (54.84%) and 'RISE AI Power Infrastructure' (44.9%). Traditional semiconductor-focused AI ETFs, centered on companies like Samsung Electronics and SK Hynix, also continue to perform well.
Investment Focus Shifts and Diversification
The rapid evolution of AI industry trends has fueled the growth and diversification of related ETFs. The investment focus is expanding beyond semiconductors to include power infrastructure, software, and humanoids.
Geographical Expansion: While US and Chinese AI corporate ETFs led the market earlier this year, the popularity of China-focused tech stocks has recently cooled, leading to a dip in the monthly returns of related Chinese AI ETFs (down to approximately -10% in the last month).
Domestic Focus: Sovereign AI: There is a growing trend of domestically-focused AI ETFs emerging, supported by the government's push for a 'Sovereign AI' policy—aiming to build a national-level AI ecosystem. Since September, three such ETFs have been launched: SOL Korea AI Software, 1Q K Sovereign AI, and KODEX Korea Sovereign AI. These new products range from those covering the entire AI value chain (infrastructure, software, cloud) to those focusing more heavily on software and platform companies, reflecting an emphasis on "AI as a Service" (AIaaS) investment.
Maturity Ahead
Industry experts suggest that as the AI industry matures, the AI ETF market will move beyond quantitative growth toward qualitative maturity. Im Tae-hyeok, head of Samsung Asset Management's ETF Management Division, commented, "The AI market is being realigned from possibility-driven themes to companies supported by actual performance." He predicts that while existing AI products will strengthen, further specialized products will emerge in line with the industry's continued expansion.
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