Data released Friday by the Korea Exchange (한국거래소) showed that 8 of the 10 listed ETFs with the highest returns in the Korean stock market this month are related to the secondary-battery industry. KODEX Secondary Battery Industry Leverage, managed by Samsung Asset Management (삼성자산운용), ranked first, with a return of 19.94% for the month through Thursday. TIGER KRX Top 10 Secondary Battery Leverage, managed by Mirae Asset Management (미래에셋자산운용), ranked second, at 18.45%.

Background and context

The report cited expectations of rising demand from artificial intelligence (AI) data centers as a reason for investor interest. Market participants said investors appeared to be buying secondary-battery ETFs on expectations that the AI boom would benefit the energy storage system (ESS) sector—systems that store electricity for use when needed.

This outlook does not mean that current results for the industry as a whole have been confirmed. The report’s central point is that expectations of a positive effect on the ESS business from expanding data-center demand were reflected in investor sentiment. ETF return rankings show what happened in the market over the period, but they do not, by themselves, tell us whether those expectations will materialize.

This is a forecast about future trends, not evidence of already confirmed growth in sales or profitability.

What this news means

For investors, the point to note is not simply that many secondary-battery ETFs ranked near the top by return, but that the interest was driven by expectations of growth connecting AI data centers with ESS. However, the figure of 8 out of the top 10 refers to the number of products. These data alone cannot show how much investment flowed into the ETFs or whether the performance of the secondary-battery sector as a whole improved.

In particular, the names of the first- and second-ranked products include the word “Leverage.” Even if their returns over the period stand out, they cannot be treated as equivalent to the performance of other secondary-battery ETFs or of the industry as a whole. Investors should look beyond the rankings and check which assets and indexes each product tracks, and whether it is a leveraged product.

For example, an investor considering related ETFs based on expectations that the expansion of AI data centers will increase demand for ESS can check a product’s investment focus and management approach rather than making a decision based only on this month’s return rankings. The important distinction in this case is that “expectations of AI-driven demand were reported as a reason for interest in related ETFs” and “whether those expectations will translate into actual returns in the future” are still separate questions.

What is confirmed and what remains unknown

Confirmed facts

  • According to data compiled by the Korea Exchange, 8 of the 10 listed ETFs with the highest returns this month were related to the secondary-battery industry.
  • KODEX Secondary Battery Industry Leverage ranked first, with a return of 19.94% for the month through Thursday.
  • TIGER KRX Top 10 Secondary Battery Leverage ranked second on the same basis, with a return of 18.45%.
  • Growing demand from AI data centers and expectations for the ESS sector were cited as reasons for investor interest.

What remains unknown

  • The report does not specify which year and month “this month” refers to.
  • The full ranking of the 10 highest-return ETFs and the other products are not provided.
  • Kim Gwi-yeon’s affiliation and title have not been confirmed.
  • The report alone does not establish the amount of investment that flowed into the related ETFs or whether the outlook will materialize.

What readers should check

  • Check the latest product documents for the investment focus and whether the product uses leverage.
  • When comparing returns, make sure the measurement period and cutoff date are the same. This report gives returns through Thursday.
  • Distinguish expectations for AI data centers and ESS from actual improvements in business revenue and profitability. The projected improvements described in the report are not confirmed results.

References