The performance leads the ETF again and announces another suspension within the year. Huatai Bairui Fund's latest announcement stated that its Huatai Bairui CSI Han Exchange South Korean Semiconductor ETF was trading at a large premium to protect investors' interests. It will be suspended from the market opening on May 8 until 10:30 on the same day. Furthermore, if the premium at the closing price tomorrow is still at a high level, the fund may continue to suspend trading to warn the market of risks. Behind the significant premium, this product with a high "Korean content" has been leading the ETF market in performance since mid-April, continuously reaching new highs. Currently, the fund's year-to-date net return has reached 71.76%; its outstanding performance undoubtedly attracts funds, combined with restrictions on QDII quotas, leading to frequent premiums. Financial media reporters have found through previous announcements that this is the 52nd time within the year that Huatai Bairui Fund has suspended trading for this product, and the company has issued over a hundred warnings about the risk of premiums for this product. This is much higher than popular QDII products such as Nasdaq Technology ETFs and Nasdaq ETFs during the same period. Popular ETFs halted trading On May 6, the Huatai Bairui CSI Han Exchange South Korean Semiconductor ETF was suspended for one hour after opening, and the premium situation eased slightly during the day. The premium rate at the closing was 8.32%, a drop of nearly 2 percentage points from the previous trading day. However, due to the strong performance of the semiconductor sector in both Chinese and Korean stock markets, the Huatai Bairui CSI Han Exchange South Korean Semiconductor ETF surged 12.74% yesterday, the only ETF to gain more than 10% that day. As a result, the premium for the Huatai Bairui CSI Han Exchange South Korean Semiconductor ETF increased again when the market opened today, reaching a premium rate of 13.9% at the closing. A persistent premium is when the secondary market trading price of an ETF is consistently higher than the reference net asset value (IOPV) of fund shares. In recent years, the semiconductor industry has been a popular sector of market focus. If a large amount of capital enters the secondary market to buy related products and the number of sellers is limited, the secondary market trading price naturally rises. As one of the cross-border ETFs, the South Korean Semiconductor ETF is more likely to have a premium. On the one hand, as market sentiment rises, the secondary market is eager to buy; on the other hand, due to limited QDII quotas, the primary market's subscription amount may not meet demand, leading to an increase in the secondary market trading price diverging from the value. This cross-border ETF established in November 2022 is the only ETF currently targeting the Korean market. Faced with such a high premium, Huatai Bairui Fund has repeatedly warned of the risks. Up to now, there have been 129 high-risk premium reminders, with 52 of them also increasing the suspension operations. During the same period, the number of risk reminders for popular QDII products such as Nasdaq Technology ETFs and Nasdaq ETFs was less than one hundred. As of May 6, Nasdaq Technology ETF had released 79 premium risk reminders. In addition, the company has also published multiple educational articles on ETF discounts and premiums and the South Korean Semiconductor ETF on its official public account. In addition, the ETF linked fund's A, C, and I shares have all stopped subscription. Why be cautious of high premiums Although the premium is still above 10%, with multiple warnings from the fund manager about the premium risk and the relaxation of QDII quotas, the overall premium level of the Huatai Bairui CSI Han Exchange South Korean Semiconductor ETF has significantly dropped from its peak. Previously, the premium level of this ETF had reached 28.89% in early March. In fact, high premiums often come with high risks. Industry experts analyze that while high premiums mean arbitrageurs can profit from the price difference between buying and selling in the secondary market, in the long run, a return to the premium is inevitable. Firstly, the high premium brought by market sentiment tends to decline as emotions cool down. Secondly, when the ETF premium is high enough, professional investors will also buy shares in the primary market and sell out corresponding shares at the higher premium secondary market trading price until the premium is eliminated. Even in terms of the investment opportunities in the underlying assets of the South Korean semiconductor industry, risks are also worth noting. Fund manager Li Muyang has mentioned in a quarterly report that the trend of the South Korean semiconductor industry may enter a new stage of intense games between "industrial prosperity" and "macro risk" in the second quarter. "At the industry level, the rigidity of AI computing demand and the rising trend of memory chip prices provide solid support for the industry. However, the biggest uncertainty still comes from geopolitics." In his view, whether the Strait of Hormuz can reopen and whether the situation in the Middle East will escalate again will directly determine the global inflation path and risk asset preference, particularly affecting the stock markets of outward-oriented economies like South Korea. In addition, he emphasized that the real suppression effect of high chip prices on downstream demand and the potential changes in supply and demand brought about by the rebound in industry capital expenditures are also worth noting. As of now, the total number of shares of the Huatai Bairui CSI Han Exchange South Korean Semiconductor ETF is 2.19 billion, an increase of 744 million shares compared to the end of last year. Coupled with the rise in net asset value, the fund's size has reached 9.55 billion yuan, an increase of 5.879 billion yuan compared to the end of last year, a growth rate of 160.15%. In the first quarter alone, the fund's current profit was 284 million yuan, with 47 ETFs having profits exceeding 200 million yuan during the same period. In addition to leading the performance within the year, the fund's performance in the past year and past three years has also ranked first among similar products, at 192.71% and 305.1%, respectively. This article is reproduced from "Financial Union", GMTEight editorial: Liu Jiayin.