Korean energy-focused exchange-traded funds surged during May 20-24, while semiconductor ETFs declined sharply, according to data released by the Korea Exchange on the 26th. The PLUS Solar&ESS ETF posted the highest return at 18.17%, followed by TIGER Oil Futures Enhanced(H) at 15.25% and KODEX WTI Oil Futures(H) at 15.18%, as escalating US-Iran military tensions drove international crude oil prices above $90 per barrel for WTI and $100 for Brent. Conversely, semiconductor ETFs experienced significant losses, with SOL Semiconductor Front-End falling 23.93% and HANARO Semiconductor Core Process Leaders dropping 20.53%, as investors took profits following recent gains and concerns emerged about the memory industry approaching a cyclical peak. The divergence reflects heightened geopolitical supply risks in energy markets coinciding with caution over semiconductor sector valuations amid Morgan Stanley's forecast that AI-driven memory demand may reach an inflection point.
Energy ETFs Post Double-Digit Gains on Oil Price Surge
The PLUS Solar&ESS ETF recorded an 18.17% gain during the May 20-24 period, marking the highest return among domestic ETFs tracked by the Korea Exchange. TIGER Oil Futures Enhanced(H) rose 15.25%, KODEX WTI Oil Futures(H) climbed 15.18%, KODEX Renewable Energy Active advanced 12.26%, and RISE US S&P Oil Production Companies (Synthetic H) gained 8.73%. The data excludes leveraged and inverse products as well as ETFs with average daily trading volumes below 100,000 shares. Energy-themed ETFs dominated the top performance rankings, benefiting from both direct crude oil futures exposure and investments in energy production companies. Solar, energy storage system (ESS), and renewable energy ETFs also posted strong gains as prolonged US-Iran military confrontations raised concerns about fossil fuel supply disruptions, directing investor attention toward alternative energy sources.
WTI and Brent Crude Surpass Key Price Thresholds
WTI crude oil prices surpassed $90 per barrel while Brent crude exceeded $100 per barrel during the period, reflecting sharp increases in international oil markets. The price surge followed escalating Middle East tensions, with supply disruption fears amplified by ongoing concerns about Russian refinery operations. Choi Jin-young, a researcher at Daishin Securities, stated that oil prices may experience short-term stabilization as ceasefire possibilities gain attention ahead of US midterm elections, but added that "medium- to long-term upward momentum is unlikely to break due to continued Middle East supply chain instability and Russian refinery operational disruptions." Choi further noted that "if liquidity effects are factored in, oil prices could reach all-time highs earlier than expected, so we maintain a low-price buying perspective during short-term corrections."
Semiconductor ETFs Record Sharp Declines Amid Profit-Taking
SOL Semiconductor Front-End fell 23.93% during the May 20-24 period, leading the decline among semiconductor-focused ETFs. HANARO Semiconductor Core Process Leaders dropped 20.53%, SOL AI Semiconductor Materials & Parts declined 17.24%, KODEX AI Semiconductor Core Equipment fell 15.51%, and SOL Semiconductor Back-End decreased 14.02%. KOSDAQ-focused ETFs also underperformed, with DS KOSDAQ Active down 17.67%, TIGER KOSDAQ Active falling 14.32%, and TIME KOSDAQ Active declining 13.37%. The broad-based weakness in semiconductor ETFs reflected a combination of profit-taking following recent sharp gains and concerns that the memory chip industry cycle may be nearing its peak. Despite strong earnings from Intel, investor sentiment deteriorated as forecasts emerged suggesting memory market conditions were approaching a turning point, triggering risk-off behavior concentrated in semiconductor stocks.
Analysts Cite Memory Industry Peak Concerns and Oil Supply Risks
Lee Kyung-min, a researcher at Daishin Securities, stated that "Morgan Stanley forecasts the AI-driven memory industry boom is approaching an inflection point, with memory prices expected to peak during the fourth quarter." Lee added that "concerns about the semiconductor industry passing its peak have resurfaced, leading semiconductor stocks to drive the market weakness." On the energy side, securities firms anticipate that international oil prices will remain elevated as long as Middle East risks persist, with supply instability and inventory declines creating sustained upward pressure on energy prices. The combination of supply anxiety in oil markets and cyclical peak worries in semiconductors has created divergent performance trends across Korean ETF sectors.
FAQ
Which Korean ETF posted the highest return during May 20-24?
The PLUS Solar&ESS ETF recorded the highest return at 18.17% during the May 20-24 period, according to Korea Exchange data released on the 26th.
Why did energy ETFs outperform while semiconductor ETFs declined?
Energy ETFs benefited from international crude oil prices surpassing $90 per barrel for WTI and $100 for Brent due to escalating US-Iran tensions and supply disruption concerns. Semiconductor ETFs declined as investors took profits following recent gains and Morgan Stanley forecasted that the AI-driven memory industry boom is approaching an inflection point, with memory prices expected to peak during the fourth quarter.
What did analysts say about future oil price movements?
Choi Jin-young of Daishin Securities stated that oil prices may stabilize short-term as ceasefire possibilities gain attention ahead of US midterm elections, but medium- to long-term upward momentum is unlikely to break due to continued Middle East supply chain instability and Russian refinery operational disruptions. Choi added that if liquidity effects are factored in, oil prices could reach all-time highs earlier than expected.
