Summary of Key Points
Recently, the global market has seen a surge in interest surrounding AI computing power: The South Korean stock market experienced a "circuit breaker" due to the sharp rise in prices of semiconductor leaders (such as Samsung and SK Hynix), reaching record highs; domestic cross-border ETFs (e.g., China-Korea Semiconductor ETF) have shown impressive returns, but with premium rates soaring (up to over 36%), accompanied by frequent risk warnings. Meanwhile, eight government departments have intensified inspections on illegal cross-border investments, making compliant QDII products highly sought after. However, due to limited quotas, nearly half of these products are either out of stock or have restricted purchase options. Institutions advise investors that although the AI sector is strong, current valuations are high, and there is a risk of premium inflation. Therefore, overseas investments should be diversified and made with a long-term perspective.
1. Why Is the South Korean Stock Market So Hot? AI Computing Power Is the Driving Force
The South Korean stock market has been on fire this year, with the KOSPI200 index even triggering a "limit-up circuit breaker" (a 5-minute trading halt) on June 1 due to a 5% increase in futures prices, setting a new all-time high, and the annual gain exceeding 108%. The reason is simple: AI requires a large number of chips, and South Korean semiconductor giants are directly benefiting.
- Samsung Electronics (the world's largest memory chip manufacturer) has risen by 191% this year, SK Hynix (a leader in HBM storage) by 263%, and LG Electronics (which focuses on AI-related hardware) by 317%. These companies are key players in the AI supply chain, and the surge in AI demand has directly boosted their performance and stock prices.
- This trend is not incidental: Large AI models require high computing power, which relies on hardware such as GPUs and memory chips. South Korean companies are globally leading in these areas, making them targets for investors.
2. High Premium Rates on Cross-Border ETFs: More Profit, but Also Hidden Risks
The China-Korea Semiconductor ETF (Huatai-PineBridge) has returned nearly 96% this year, but with a premium rate of 17.98%. What does this mean? In simple terms, you are paying 18% more than the fund's actual value. For example, if the net asset value of the fund is 1 yuan, you would pay 1.18 yuan for one share. Once market sentiment cools down and the premium rate drops, you will immediately lose that 18%.
- This ETF has issued over 160 risk warnings and been suspended from trading 86 times this year, yet investors continue to buy it enthusiastically. On June 1, its trading volume reached 13.2 billion yuan (a 1.3-fold increase from the previous day), with a turnover rate of nearly 100%—almost all shares were traded.
- This is not an isolated case; premium rates on NASDAQ-themed ETFs generally exceed 11%, with some reaching as high as 21%. The essence of this phenomenon is a bubble driven by scarcity and market sentiment: Many investors want to buy overseas AI stocks through ETFs, but due to limited quotas, prices have been driven up.
3. Why Are QDII Products Suddenly in Short Supply? Quotas Are the Issue
After the eight departments tightened regulations on illegal cross-border securities transactions, investors had to turn to compliant channels like QDII to invest overseas. However, QDII quotas are now in short supply:
- QDII quotas are foreign exchange allowances allocated by the state to fund companies (for example, a company with a quota of $1 billion can no longer buy overseas assets once it is used up). Of the 331 QDII products available in the market, 45 are out of stock, and 119 have restricted purchase options (e.g., only allowing purchases of up to $1,000 per day), meaning nearly half of them are unavailable.
- The advantage of QDII is that investors do not need to exchange currency themselves (the fund company handles this on their behalf) and do not require a foreign account. This makes it accessible to ordinary investors with modest incomes. However, with the sudden surge in demand, quotas have become scarce, turning what was once an easy option into a luxury.
4. Four Recommendations from Institutions for Ordinary Investors
1. Avoid the AI Bubble: Although the AI sector is strong, current valuations are high after consecutive gains, and there may be a short-term correction. For example, China Merchants Fund suggests shifting from chasing rising prices to focusing on more stable, reliable investments in AI infrastructure (such as GPUs, memory, and optical modules) rather than purely speculative stocks.
2. Be Cautious of High Premium Rates: When buying cross-border ETFs, check the premium rate carefully. If it exceeds 10%, you are paying an extra 10% for each share. If the premium rate falls, this additional cost could result in significant losses.
3. Diversify Your Overseas Investments: Fund managers recommend allocating 10%-30% of your portfolio to overseas assets as a way to diversify risks. QDII products can help balance returns by reducing exposure to the A-share market, especially since stocks in the U.S. and China have low correlation.
4. Invest in Semiconductors for the Long Term: Fund managers warn that semiconductors are a fundamental driver of AI development, but their performance is characterized by long-term stability with short-term volatility. Avoid investing all your funds at once during periods of high market sentiment; instead, spread your investments over time.
Conclusion
The current market enthusiasm for AI is evident, but so are the associated risks. The high premium rates in the South Korean stock market and cross-border ETFs reflect market sentiment, while the shortage of QDII quotas indicates a surge in legitimate investment demand. Ordinary investors should remember to stay focused: Don't let short-term gains cloud your judgment. Diversify your investments, avoid high premium rates, and adopt a long-term strategy. Investing is not about gambling; safety comes first.