Want to Buy ETFs With Samsung and SK Hynix? These 2 ETFs Can Deliver.
Two of South Korea’s largest and most prominent companies are leading the artificial intelligence (AI) boom. Samsung Electronics (SSNLF +0.00%) and SK Hynix (SKHY +19.72%) sell some of the world’s most in-demand semiconductors and memory chips that are essential for building AI data centers.
Last week, SK Hynix made its debut on the Nasdaq, where it quickly raised $26.5 billion from U.S.-based investors. In June, Samsung and SK Hynix led a group of companies that announced about $880 billion in new investment to build chips and data centers in South Korea, reflecting strong expectations for future demand for their products.
Buying individual shares of SK Hynix stock on the Nasdaq or investing in Samsung shares through over-the-counter (OTC) markets is one way into the South Korean AI trade. But if you’d rather own these international AI stocks as part of a more diversified portfolio, several low-cost international ETFs offer exposure to these popular AI memory stocks.
Here are three international ETFs that make it easy for American investors to own Samsung and SK Hynix.
Image source: Getty Images.
State Street SPDR Portfolio Developed World ex-US ETF (SPDW): Samsung and SK Hynix are 5.1% of the fund
The State Street SPDR Portfolio Developed World ex-US ETF (SPDW +1.27%) is a well-diversified international ETF that holds 2,443 stocks and charges ultralow fees, with an expense ratio of 0.03%. This fund focuses on developed markets outside the U.S. — this and many other ETFs categorize South Korea as a developed market, but the country’s stocks are also included in some emerging market ETFs.
As of July 9, Samsung and SK Hynix were the top two stock holdings in this ETF, with a combined weight of 5.09% of the fund. The rest of the fund’s top five stocks are ASML Holding (2.14% of the fund), global bank HSBC Holdings (1%), and Swiss pharmaceutical giant Roche Holding (0.88%).
This international ETF has delivered average annual returns (by net asset value) of 28.32% in the past year and 9.81% for the past five years.
SPDR Index Shares Funds – State Street SPDR Portfolio Developed World ex-US ETF
Today’s Change
(1.27%) $0.63
Current Price
$50.09
Key Data Points
AUM
$40B
Dividend Yield
3.03%
Expense Ratio
0.03%
Top Holdings
SMSN
2.67%
A000660
2.38%
ASML
2.08%
Vanguard FTSE All-World ex-US ETF (VEU): Samsung and SK Hynix are 4.4% of the fund
The Vanguard FTSE All-World ex-US ETF (VEU +1.12%) is an even more broadly diversified global ETF that invests in developed markets and emerging markets. This Vanguard ETF holds 3,853 stocks, and Samsung and SK Hynix rank as the fund’s second and third largest stock holdings. The two South Korean semiconductor stocks make up a combined 4.41% of the fund’s assets.
The rest of this ETF’s top five holdings are Taiwan Semiconductor Manufacturing (in first place, making up 4.32% of the fund’s assets), Dutch semiconductor stock ASML Holding (1.51%), and Chinese tech giant Tencent Holdings.
This ETF charges an ultra-low expense ratio of 0.04% . It has delivered average annual returns (by net asset value) of 28.27% in the past year and 9.1% for the past five years.
Vanguard International Equity Index Funds – Vanguard Ftse All-World ex-US ETF
Today’s Change
(1.12%) $0.92
Current Price
$82.92
Key Data Points
AUM
$94B
Dividend Yield
2.55%
Expense Ratio
0.04%
Top Holdings
2330.TW
4.37%
005930.KS
2.41%
000660.KS
2.05%
iShares Core MSCI Total International Stock ETF (IXUS): Samsung and SK Hynix are 3.9% of the fund
Compared with the other two ETFs, the iShares Core MSCI Total International Stock ETF (IXUS +1.14%) offers the most broadly diversified portfolio, with 4,337 stocks. This global ETF also charges a low-cost expense ratio of 0.07% .
Samsung and SK Hynix make up a combined 3.93% of this ETF’s assets. The rest of the fund’s top five stocks are familiar international tech names: Taiwan Semiconductor (4.36% of the fund), ASML (1.68%), and Tencent (0.87%). This iShares ETF has delivered average annual returns of 27.35% in the past year and 8.77% for the past five years.
iShares Trust – iShares Core Msci Total International Stock ETF
Today’s Change
(1.14%) $1.07
Current Price
$94.64
Key Data Points
AUM
$58B
Dividend Yield
2.96%
Expense Ratio
0.07%
Top Holdings
2330.TW
4.44%
005930.KS
1.88%
ASML.AS
1.62%
Which Samsung and SK Hynix ETF should you buy?
Buying Samsung and SK Hynix through an ETF is not the same as taking a concentrated position by investing in these companies’ individual shares. All three funds are well diversified and charge similarly low expense ratios. The State Street SPDR Portfolio Developed World ex-US ETF (SPDW) has comfortably outperformed the other two funds in the past 10 years.
SPDW Total Return Level data by YCharts
The State Street SPDW ETF has a slightly higher allocation to Samsung and SK Hynix, but that’s no guarantee that it will perform better than the other funds in the future. If you want to make sure that the biggest South Korean AI chip stocks are in your portfolio, buying any of these international ETFs could be an easy, low-cost move for long-term investors.
