Korean Investors China Robotics ETFs Investment

While South Korean companies are actively reducing their reliance on China amid escalating geopolitical tensions, retail investors in Korea are taking a different approach, increasing their investments in China’s burgeoning humanoid robotics sector.

This divergence underscores a growing gap between corporate strategy and individual investor sentiment, with many believing China’s established manufacturing prowess and robust supply chains provide a crucial advantage in the rapidly evolving robotics industry.

Humanoid robotics has rapidly emerged as a key technological battleground, with global companies vying to develop robots capable of performing human tasks. This includes high-profile projects like Tesla’s Optimus and Hyundai Motor Group’s Atlas, fueling predictions that humanoid robots will become the next major industrial ecosystem following electric vehicles.

South Korean investors are strategically positioning themselves to capitalize on this future by investing in exchange-traded funds (ETFs) focused on China’s robotics supply chain.

According to the Korea Exchange, seven ETFs listed in Korea specifically track the humanoid robotics industry: two focused on Korean companies, two on US companies, two on Chinese companies, and one covering global firms.

Assets tracking China and Korea are nearly equivalent, with 652 billion won ($444 million) and 683 billion won, respectively. Both figures are significantly higher than the 423 billion won invested in US-focused robotics funds.

These investment trends reflect a growing confidence that China’s manufacturing capabilities and robust component supply chains will translate into a leadership position in the development and deployment of humanoid robots.

“Although the humanoid robotics industry is still in its nascent stages, the ecosystem is increasingly centering around China,” stated Lee Jong-min, Team Manager of ETF Management Team 2 at Mirae Asset Global Investments.

Lee explained that the sector’s supply chains are mirroring those of the electric vehicle industry, where China has already secured global dominance.

“As demonstrated in industries like solar panels, drones, and EVs, China tends to achieve rapid large-scale commercialization by leveraging its supply chain strength and cost competitiveness,” he said. “This advantage could enable the country to expand its global market share in humanoid robotics.”

In line with this outlook, Mirae Asset launched the Tiger China Humanoid Robot ETF in May to target companies across China’s robotics ecosystem, encompassing motors, sensors, actuators, and control systems.

Key holdings include collaborative robot developer Shenzhen Dobot, humanoid robotics company UBTech Robotics, and electric vehicle manufacturer XPeng, which is also actively developing humanoid robot technologies.

Samsung Asset Management also offers the Kodex China Humanoid Robot ETF, which tracks the Solactive China Humanoid Robotics Index, covering companies involved in robotics development, motion control systems, and automation technologies.

Over the past six months, the Tiger China Humanoid Robot ETF has seen a gain of 9.58 percent, outperforming its domestic competitor, which recorded a 0.5 percent loss.

However, both funds have lagged behind US-focused robotics ETFs, which rose between 15 percent and 30 percent, and a global robotics ETF, which gained approximately 60 percent during the same period.

Despite the performance differences, analysts maintain that exposure to China remains appealing due to the concentration of crucial component production within the country.

“Many key suppliers of motors, actuators, and rare earth materials are based in China, creating choke points within the global robotics supply chain,” Lee explained. “Even companies like Tesla are not immune to these dependencies.”

For investors, this supply chain dominance may outweigh the importance of identifying the ultimate winner in the humanoid robotics race.

“In such an early-stage industry, technological shifts can rapidly reshape the competitive landscape,” Lee said. “It may be more prudent to invest in the broader ecosystem rather than attempting to predict the success of individual companies.”

Some analysts also highlight valuation disparities within China’s equity market.

While the US economy’s gross domestic product is projected to be around $30 trillion in 2025, compared to approximately $20 trillion for China, the gap in stock market valuations remains significantly wider.

This discrepancy suggests that Chinese equities may have room for a global re-rating, creating opportunities for investors willing to accept geopolitical risk.

“China faces risks from intensifying strategic rivalry with the US,” said a market analyst specializing in Chinese equities. “However, these risks can be managed through portfolio allocation, leaving significant long-term investment potential.”

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