Want to Buy SK Hynix? These 3 ETFs Let You Own It and Thousands of Other Stocks.
Key Points
SK Hynix is a major South Korean memory chip stock that just made a $26.5 billion Nasdaq debut.
Several international ETFs hold SK Hynix stock as part of their broadly diversified portfolios.
The State Street SPDR Portfolio Developed World ex-US ETF holds SK Hynix stock as 2.38% of its fund portfolio, and has slightly outperformed these other two international ETFs in the past 10 years.
One of the most important South Korean semiconductor stocks just started trading on the U.S. stock market. SK Hynix raised $26.5 billion last Friday, when it started trading on the Nasdaq. Investors are excited about this company because its high-bandwidth memory chips are essential for powering the artificial intelligence (AI) boom.
If you want to buy SK Hynix stock, investing in individual shares is one way to do it. Or if you want to own SK Hynix as part of a broadly diversified exchange-traded fund (ETF), there are a few international stock ETFs that hold this high-profile South Korean memory stock in their portfolios.
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Let's look at a few popular international ETFs that let you buy SK Hynix.
Image source: Getty Images.
1. State Street SPDR Portfolio Developed World ex-US ETF: SK Hynix is 2.38% of the fund
The State Street SPDR Portfolio Developed World ex-US ETF (NYSEMKT: SPDW) is a low-cost international ETF that invests in global stocks in developed markets outside the U.S. It charges an ultra-low expense ratio of 0.03% and has about $40 billion of assets under management.
As of July 9, the fund owned 2,443 stocks, with SK Hynix as the second largest holding, making up 2.38% of the fund. Other top stocks in the portfolio include semiconductor stocks Samsung Electronics and ASML Holding (NASDAQ: ASML), international banks, and pharmaceutical companies. In the past year, this fund has delivered an impressive return (by net asset value) of 28.32%.
2. Vanguard FTSE All-World ex-US ETF: SK Hynix is 2.03% of the fund
The Vanguard FTSE All-World ex-US ETF (NYSEMKT: VEU) is another broad international ETF. It charges a low expense ratio of 0.04% and holds $94.4 billion of net assets. This fund is more diversified than the State Street fund, because it invests in emerging market stocks as well as developed markets.
This Vanguard fund holds 3,853 stocks as of May 31, with SK Hynix ranked as the third-largest holding with 2.03% of the fund. Other top holdings include Taiwan Semiconductor Manufacturing and Chinese tech majors Tencent and Alibaba Group. This ETF has delivered a past-year total return (by net asset value) of 28.27%.
3. iShares Core MSCI Total International Stock ETF: SK Hynix is 1.89% of the fund
The iShares Core MSCI Total International Stock ETF (NASDAQ: IXUS) is the most diversified fund on this list, with a portfolio of 4,337 stocks. This ETF holds a total of about $58.6 billion in net assets. Its 0.07% expense ratio is slightly higher than the other two funds, but still quite low-cost.
SK Hynix ranks as the third largest stock holding in this ETF's portfolio, making up 1.89% of the fund. The rest of this fund's top 10 holdings are mostly similar to the Vanguard fund: semiconductor stocks from Asia and the Netherlands, pharmaceutical giants, and major international banks. The fund has delivered a similar total return in the past year: 27.35%.
Which SK Hynix ETF should you buy?
Choosing the best ETF to buy SK Hynix mostly depends on whether you want to own emerging market stocks as part of your portfolio, or if you want to focus more on developed markets. Not every stock market index counts South Korea as a "developed market."
Since these three ETFs all hold thousands of global stocks and have some overlap among their top holdings, they tend to deliver similar performances. But over the long term, one fund has meaningfully outperformed the other two. In the past 10 years, the State Street SPDR Portfolio Developed World ex-US ETF (SPDW) has done the best, with a total return of 170.5%.
SPDW Total Return Level data by YCharts
These three international ETFs are all broadly diversified funds that own thousands of stocks. SK Hynix makes up a small percentage of their portfolios. Buying SK Hynix as part of an ETF is not an all-in bet on this AI chip stock.
But if you want to include the international AI trade in your portfolio, choosing ETFs that own SK Hynix could be a smart way to stay invested in a powerful trend.
Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Taiwan Semiconductor Manufacturing, Tencent, and Vanguard International Equity Index Funds-Vanguard Ftse All-World ex-US ETF. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.