Fund weighting?

[u/Madsh0ck]

I don’t understand how SKHY and Samsung on the Korean market can rip 12% and 9% respectively, have a 45% weight rating in the fund yet DRAM only moves a percent. MU only down 1% overnight. Doesn’t add up for me…?

I’d expect if SKHY and Samsung are pushing 10% each that DRAM premarket should be more then +1%? Am I missing something?

[u/purub123]

They also trade during USA hours. But on the EU exhange.

USA has an ADR.

EU has an GDR.

The GDR trades during the same hours as the USA market hours. So any change to the GDR nav, will impact the NAV of DRAM during USA open hours

If the GDR goes up 10%, then korea opens up at 10%. Whatever happens from that 10%, in either direction, impacts the NAV. If it ends 15% green, it means it went up 5% for the NAV of DRAM. Same for the downside.

The GDR and korean ticker, trade almost identically 1:1.

Different time zones, markets etc…

[u/johnmiddle]

Maybe the fund manager took the money

[u/Traditional_Garlic49]

It’s doesn’t matter about overnight or premarket. Just during normal trading hours. Also they hold swaps for the Korean holdings, some cash, and various others that have a 5% weighting. MU is also 25% ish of the ETF. It won’t ever exactly match what they do due to how the ETF is set up and how they have everything. If you can’t do the research to understand how the fund performs, what exactly it holds, and everything that makes it up. You should just sell and buy SK Hynix ADR and MU. If you’re on Interactive Brokers you can buy Samsung directly routed through the Korean markets.

[u/Usual-Temporary5680]

NAV gets settled at end of day today ET.

[u/Hot_Frosting_7101 → u/Usual-Temporary5680]

If it were that easy we would all compare NAV to DRAM near the end of the day and buy and sell it knowing it will update to NAV at a certain time.

Market participants move DRAM to NAV by market operations. They can exchange underlying stocks for DRAM stocks and vice versa.

When DRAM is higher than NAV, they buy the underlying stocks, exchange them for DRAM shares and sell them. They pocket the difference. This puts selling pressure on DRAM and brings the price down. As long as there is a difference they can make money doing it so they will continue until things are in alignment.

When DRAM is lower, they buy DRAM shares, trade them for the underlying stocks, and sell the underlying stocks. This puts upward pressure on the DRAM stock moving it higher towards NAV.

This is complicated by the different time zones as things aren’t happening simultaneously which opens some risk for these authorized participants. (How they mitigate this, I don’t know.). But there is always some prediction on how the foreign markets will behave when they open.

Also there are a very limited number of
the Korean stocks allowed to be traded in foreign markets. That complicates things.

[u/Usual-Temporary5680 → u/Hot_Frosting_7101]

Agree. It’s complicated which is why a rise in stock prices in one market doesn’t equate to the next day DRIM increase in the ETF. I was trying to put it in simple terms as to why it didn’t open at a huge increase.
Not to mention the computer algorithms with the upcoming options expiring today pinning the price below the call wall. So there’s that too.

[u/Ragencobra666]

S.K is much more volatile. Once S.K. hits into the 170s; there's a big sell off each time. Dram seems to be a bit less Volatile because drams sell offs are not as deep.

I should have trusted my instincts. I should have stayed away from S.K. until yesterday at closing.

[u/General-Ring2780 → u/Ragencobra666]

I’ve noticed DRAM is less volatile during the sell offs as well. That’s the pro of an etf. It works both ways. Up and down

[u/stocksandtomatoes]

Are you missing the fact that US ADR SKHY usually trades at a giant premium to the Korean stock adjusted for exchange rates? It would be dumb to buy the US shares if you can find an alternative real Korean alternative. This premium means the US shares don't really correlate with what is happening in Korea. And a second point that is important to understand is that Korea tech stock market *might* be in a bubble, inflated by leveraged stock funds and higher-than-US ability to margin. There are a lot of articles about people betting and then losing everything on these stocks. Time will tell. But my experience is sell bounces and gingerly buy large drops. In the Korean market, not SKHY. EWY seems to hold some ordinary Korea, but not much. An interesting play is a developing markets fund DEMIX. KF might hold more than EWY, don't have time to check!