A new exchange-traded fund focused on memory chipmakers has attracted over $1 billion in just 18 days, signaling intense investor demand for a pure-play vehicle to invest in the artificial intelligence supply chain.
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New memory ETF DRAM hits $1 billion in 18 days on AI bet
The Roundhill Memory ETF (DRAM) crossed $1 billion in assets under management less than three weeks after its April 2 debut, a rapid accumulation of capital that highlights a gap in the market for direct exposure to the memory sector fueling the AI boom. The fund’s success comes as investors were previously piling into South Korean country funds to gain access to memory giants Samsung Electronics and SK Hynix.
"The demand signal was buried in those flows, and Roundhill read it correctly," said a Bloomberg analyst, referencing the heavy inflows into the iShares MSCI South Korea ETF (EWY) prior to DRAM's launch.
Since DRAM's launch, the EWY ETF has continued to see strong demand, pulling in another $235 million and pushing its year-to-date haul to $6.2 billion. This suggests the investment thesis for South Korean equities extends beyond memory, with investors also targeting defense and industrial names. Foreign investors have been net buyers of 5.25 trillion won in the KOSPI this month, with SK Hynix and Samsung Electronics seeing inflows of 2.16 trillion won and 1.32 trillion won, respectively.
The explosive growth of the DRAM ETF validates the thesis that investors are seeking more targeted instruments to bet on specific sub-sectors of the technology market, particularly those integral to the AI build-out. While broader market ETFs like EWY offer diversified exposure, DRAM's success may spur a new wave of thematic funds aimed at capturing niche, high-growth corners of the global supply chain, potentially fragmenting flows that were previously concentrated in country-specific ETFs.
The success of the DRAM ETF is a testament to the surging investor interest in the memory sector, a critical component of the AI hardware ecosystem. For months, market participants had been using the iShares MSCI South Korea ETF (EWY) as a proxy to invest in Samsung Electronics and SK Hynix, which together constitute about 44% of the fund. The consistent inflows into EWY, which have totaled $8.7 billion over the past year, were a clear indicator of the pent-up demand for a more direct investment vehicle.
Roundhill's ability to identify and capitalize on this demand has resulted in one of the most successful ETF launches in recent history. The fund's rapid growth to over $1 billion in assets under management in just 18 days reflects both the timeliness of the product and the market's desire for more granular exposure to the AI theme.
A Tale of Two ETFs
Interestingly, the launch of DRAM has not cannibalized flows into EWY. The South Korea-focused ETF has attracted an additional $235 million since DRAM's inception, indicating that investors still see value in a broader Korean equity play. This suggests that the bull case for South Korea may be more diverse than just the memory sector, with other industries such as defense and industrials also attracting investor capital.
The continued strength in both ETFs highlights a broader trend in the asset management industry: the rise of thematic and sector-specific funds. As investors become more sophisticated, they are increasingly looking for tools that allow them to express precise market views. The success of DRAM is likely to encourage other asset managers to launch similar products targeting other niche areas of the market.
This article is for informational purposes only and does not constitute investment advice.
