Fund Spotlight: Riding South Korea’s memory supercycle with the LionGlobal Korea Fund

• South Korea’s investment outlook remains supported by the ongoing AI-driven memory chip boom, with strong demand for high-bandwidth memory (HBM) expected to sustain earnings growth for major Korean technology companies through at least 2030.
• The LionGlobal Korea Fund SGD maintains significant exposure to the Information Technology sector at 61.6% of the portfolio, with concentrated positions in memory leaders such as SK Hynix and Samsung Electronics, positioning the fund to benefit from the AI and semiconductor upcycle.
• The fund outperformed the benchmark year-to-date (as of 31 July 2026), returning 81.5% versus the index’s 79.7%, reflecting a recovery in memory-exposed names following the sharp selloff in early 2026.
• The fund has also demonstrated higher downside volatility, with a 3-year downside deviation of 20.4% compared to the benchmark (19.9%) and JPMorgan Funds Korea Equity (17.1%), reflecting the concentrated IT and memory tilt.
• The SGD share class is Supplementary Retirement Scheme (SRS)-eligible, enabling tax-advantaged contributions under the SRS.

South Korea's investment thesis has been materially strengthened by two consecutive quarters of record-breaking earnings. In 1Q26, SK Hynix delivered revenue of KRW 52.6 trillion and operating profit of KRW 37.6 trillion at an all-time high operating margin of 72%, with revenue surging 198% YoY and 60% QoQ. The supercycle then accelerated further in 2Q26: SK Hynix reported revenue of KRW 79.3 trillion and operating profit of KRW 60.5 trillion at a 76% operating margin, another all-time high, with revenue up 257% YoY and 51% QoQ. A single quarter's operating profit already exceeded SK Hynix's full-year 2025 operating profit of KRW 47.2 trillion, and cumulative 1H26 revenue crossed KRW 100 trillion for the first time in company history.

Samsung Electronics matched this momentum. In 2Q26, Samsung posted consolidated revenue of KRW 171.5 trillion, another all-time quarterly high representing a 28% QoQ and 130% YoY increase, with operating profit reaching KRW 89.5 trillion. The Device Solutions division posted KRW 127.5 trillion in consolidated revenue and KRW 89.2 trillion in operating profit for the quarter, with the Memory Business setting an all-time high for both revenue and operating profit. Both companies have begun mass shipments of HBM4 and have secured long-term supply agreements with major hyperscaler customers, incorporating advance payments and minimum pricing mechanisms that materially improve earnings visibility.

The implications from both sets of results are clear: the memory supercycle is accelerating rather than moderating. SK Hynix's CEO has stated that the memory shortage is expected to worsen in 2027 and persist until at least 2030, while supply constraints are structurally entrenched given the long lead times required to bring new capacity online and the significantly higher material consumption of HBM relative to conventional DRAM.

Against this backdrop, the LionGlobal Korea Fund SGD offers investors an opportunity to capitalise on the AI-driven memory chip upcycle, supported by South Korea's two dominant memory producers.

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LionGlobal Korea Fund SGD: Riding on the memory supercycle

Managed by Lion Global Investors (part of the OCBC Group), the LionGlobal Korea Fund SGD runs a focused, high-conviction portfolio anchored to the memory supercycle thesis. Information Technology accounts for 61.6% of the portfolio (Figure 1), which remains the dominant sector allocation despite sitting below the MSCI Korea Index weighting of 70.4%. The fund’s relative underweight in IT is offset by a meaningful overweight in Industrials (16.6% versus 11.9% in the index), reflecting the manager’s conviction in South Korean defence and industrial names alongside the core memory thesis.

Figure 1: The fund maintains a significant allocation to Information Technology, with an overweight in Industrials relative to the MSCI Korea Index

The fund's most distinctive active call lies in how it constructs Samsung exposure. Rather than holding Samsung Electronics ordinary shares at benchmark weight (22.4%), the manager holds only 11.5% in ordinary shares, substituting with a meaningful 11.1% in Samsung Electronics Preference Shares (versus just 0.1% in the index).

As of 31 July 2026, preference shares traded at approximately 25% below ordinary shares. Since both share classes carry identical dividend entitlements, the lower entry price of preference shares translates into a higher dividend yield, offering the same economic exposure at a materially lower entry price.

The fund also holds SK Square Co Ltd at 8.9% versus 3.3% in the index. As SK Hynix's listed parent, SK Square provides additional indirect exposure to HBM demand growth. The position also captures potential valuation re-rating from Korea's "Value-Up" corporate governance reform programme, which has accelerated market reassessment of holding company discounts across Korean equities.

Table 1: The fund’s top holdings reflect a high-conviction tilt toward memory and selected supply chain names

Top 10 Holdings	Fund Weight	Index Weight
SK Hynix Inc	19.4%	22.4%
Samsung Electronics Co Ltd	11.5%	23.2%
Samsung Electronic Company Limited Preference shares	11.1%	0.1%
SK Square Co Ltd	8.9%	3.3%
Samsung Electro-mechanics	6.5%	2.4%
Samsung C&T Corp	5.1%	1.1%
LionGlobal SGD Liquidity Fund	2.3%	-
Hanwha Aerospace Co Ltd	2.2%	1.1%
Samsung Life Insurance Co Ltd	2.0%	1.1%
D'alba Global Co Ltd	2.0%	-
Source: LionGlobal Investors Factsheet. BlackRock MSCI South Korea ETF Holdings, iFAST Compilations. Holding data as of 31 July 2026.

Beyond memory, the fund’s overweight in Hanwha Aerospace (2.2% versus 1.1% in the index) reflects a secondary industrial thesis: elevated global defence spending continues to structurally support South Korean industrials. The fund also holds Samsung C&T Corp (5.1% versus 1.1% in the index) and Samsung Life Insurance (2.0% versus 1.1%), adding conglomerate and financial exposure that provides some diversification beyond the pure memory theme. A notable new addition is D’alba Global Co Ltd (2.0%, not in the index), a South Korean skincare brand, suggesting the manager is selectively extending into domestic consumer names with strong export momentum.

Related article: SK Hynix: The indispensable memory giant in AI era

Related article: Samsung Electronics 2Q26: Memory is paving Samsung's new growth path

Performance: Strong long-term alpha, with higher volatility

The fund outperformed the MSCI Korea Index YTD, returning 81.5% versus the index’s 79.7% and well ahead of JPMorgan Funds Korea Equity’s 38.9% (all in SGD terms, as of 31 July 2026, Figure 2). The fund's outperformance reflects its concentrated exposure to memory names, which rallied strongly on the back of record earnings from both SK Hynix and Samsung Electronics across 1Q26 and 2Q26.

Figure 2: Performance comparison — LionGlobal Korea Fund vs. MSCI Korea Index and JPMorgan Funds – Korea Equity

Over longer horizons, the active approach adds clear value across 3-years and 5-years. The fund delivered annualised returns of 42.5% over 3 years and 19.1% over 5 years, outperforming both the benchmark (39.6% and 16.1%) and JPMorgan Funds Korea Equity (27.1% and 9.1%) across both periods.

Calendar year returns (Figure 3) further illustrate the fund’s ability to generate alpha relative to the benchmark over four of the past five years. In 2025, the fund returned 94.0%, outperforming the index (89.4%) and JPMorgan Funds – Korea Equity (75.8%) as HBM-exposed names rallied sharply.

The trade-off, however, is visibility in down-markets: in 2021, JPMorgan Funds Korea Equity returned 8.5% while the LionGlobal Korea Fund returned only 2.5%, reflecting JPMorgan’s more diversified, less tech-concentrated positioning.

Figure 3: Calendar year performance

This pattern is consistent with the funds’ risk profiles: the LionGlobal Korea Fund’s 3-year downside deviation of 20.4% is higher than both the MSCI Korea Index (19.9%) and JPMorgan Funds Korea Equity (17.1%) (Figure 4), reflecting the cost of its concentrated IT and memory tilt. Investors who prioritise a smoother return profile may find JPMorgan Funds Korea Equity’s relatively lower technology exposure more appropriate, even if it means giving up some upside in strong memory-driven rallies.

Figure 4: 3-year downside deviation

Key reasons to include LionGlobal Korea Fund SGD in your portfolio

Targeted exposure to the memory supercycle. The LionGlobal Korea Fund’s concentrated positions in SK Hynix, Samsung and SK Square provide direct and indirect exposure to HBM demand growth. The supply-demand imbalance in memory is likely to persist through at least 2030. That said, the concentrated IT and memory tilt comes with higher downside volatility relative to the peer fund and the benchmark, making it better suited for investors with higher risk tolerance. Investors seeking broader Korean equity exposure with relatively smaller tech exposure may wish to consider the JPMorgan Funds - Korea Equity as an alternative.

Active management allows for higher conviction picks. Rather than mirroring the index, the fund concentrates assets in its highest-conviction ideas. SK Square Co Ltd (8.9% versus 3.3% in the index), classified under Industrials, is the primary driver of the fund's meaningful Industrials overweight of 16.6% versus the index's 11.9%, while also providing indirect exposure to SK Hynix's HBM earnings growth as its listed parent. Within IT, the fund takes a selective approach, with a notable overweight in Samsung Electro-Mechanics (6.5% versus 2.4%), a key semiconductor supply chain name.

SGD share class with Supplementary Retirement Scheme (SRS) eligibility. The SGD share class may be an easy way for Singapore-based investors to capitalise on the memory chip supercycle. The fund is also SRS-eligible, enabling tax-advantaged contributions under the SRS.

This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report — including all investment theses, ratings, price targets and conclusions — has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.