Timefolio Asset Management said its TIME China AI Tech Active exchange-traded fund posted the highest one-year return among Greater China-focused ETFs listed in South Korea.
The fund returned 59.98% over the 12 months through the 7th of this month, according to data from the Korea Exchange and FnGuide released on the 9th. That ranked first among 57 domestically listed ETFs investing in China, Hong Kong and Taiwan. Since its listing on May 13 last year, the fund has delivered a cumulative return of 81.99%, and its net assets have grown to 335.3 billion won.
The actively managed fund is not confined to a single market such as mainland China, Hong Kong or Taiwan. Instead, it selects companies across Greater China that are expected to benefit from growth in the artificial intelligence industry, adjusting holdings and weightings in response to industry trends and market conditions. Its largest holdings include Z.AI at 5.53%, Elite Material at 5.19%, Zhongji Innolight at 5.08% and Nanya Technology at 5.02%.
The gap widened when measured against major Greater China benchmarks over the same period. In won terms, the Hang Seng Tech Index returned 0.79%, the CSI 300 Index 5.58% and the STAR 50 Index 30.55% over the past year, according to Bloomberg. All fell far short of the fund's 59.98% gain.
Rapid growth in AI investment and usage within China is also lifting expectations for related companies, the firm said. Daily AI token usage in China surged from about 100 billion in early 2024 to more than 140 trillion in March this year, according to China's National Bureau of Statistics. Alibaba's revenue from AI cloud and computing services rose 45% from a year earlier to 48.4 billion yuan in the quarter ended June.
"China's AI industry is entering a genuine period of expansion, with infrastructure investment and actual usage growing in tandem," an official at Timefolio Asset Management said. "We plan to manage the fund by focusing on the powerful growth opportunities being created within the AI industry itself, rather than on the broader direction of Greater China equity markets."
