New Memory ETFs Look to Cache In on DRAM’s Historic Success

Let’s take a trip down memory lane. 

The Roundhill Memory ETF (DRAM) made history after its April launch, attracting more than $23 billion of net flows, the fastest exchange-traded fund to pull such numbers. The fund gives investors hard-to-find access to the biggest names in the memory chip manufacturing industry, including Korean companies that were previously difficult to invest in directly. Since then, several other memory funds have launched, with differing strategies all looking to grab a piece of the action. While the segment has been one of the best performers of the year, the recent US listing of Korean chipmaker SK Hynix may siphon some assets that would have otherwise flowed into these ETFs. 

“SK Hynix, maybe, changes the game,” said Todd Rosenbluth, head of research at VettaFi, now that investors can buy the stock directly. “A lot of money went into space ETFs in advance of SpaceX listing, and some of that money has flowed out because it was short-term investments.”

Cache Me If You Can

Artificial intelligence relies on massive amounts of memory to power large language models, and as models improve, they need more of it to process data in real time. Three companies dominate memory chip manufacturing: Micron, the only American player, and Korean rivals Samsung and SK Hynix. The high demand has created a bottleneck in the AI infrastructure buildout. “These three companies have extreme pricing power,” said Howard Chan, CEO and co-founder of Kurv, which recently launched its own memory ETF. “Because of this huge demand, supply for most of what they call HBM, high-bandwidth memory, has been sold out until the end of 2027. Flows will continue to come into the space because this bottleneck isn’t an issue that’s going to be resolved over the next six months or even a year.” 

Following DRAM’s success, a few other recently launched ETFs are hoping to capitalize, according to Morningstar data: 

• The Tema Memory ETF (DISK), launched June 30, has attracted $43 million in assets as of the closing bell on Friday, according to ETF.com. 
• The Kurv Memory Select ETF (KMEM), which also listed June 30, pulled in $40 million in net flow.
• The Tuttle Capital Concentrated Memory Stack ETF (HBMX), launched June 2, has $34 million in AUM.  

Nothing Lasts Forever: Chan sees room for memory ETFs to keep running, but Rosenbluth isn’t so sure. “Stocks don’t rise in perpetuity,” he said. “People who are looking at a product that has climbed this high, this fast, should be prepared that it might pull back because the stocks are priced for significant growth, which may or may not materialize.”