There’s an ETF for That? Memory Stocks

Roundhill Memory ETF

DRAM

DRAM has very clearly been the breakout winner in this category. At roughly $6.66 billion in assets under management already, Roundhill Investments has struck gold with this launch, especially with a 0.65% expense ratio attached to it.

A big part of the ETF’s success comes down to its active management approach. Active ETFs often get criticized for higher fees and the risk of underperforming benchmarks, but this is one of those rare cases where flexibility appears to have helped.

Had Roundhill gone with a traditional index methodology, it likely would have been constrained by diversification rules and rigid eligibility screens that would have diluted the exposure.

Instead, DRAM is highly concentrated and unapologetically thematic. Roughly 75% of the portfolio sits in just three companies: SK Hynix, Micron Technology, and Samsung Electronics. Two of those trade primarily on Korean exchanges, and the broader portfolio also includes names from Taiwan and Japan that many retail investors would otherwise have difficulty accessing directly.

Packaging all of that into a single U.S.-listed ETF, delivering concentrated exposure, and launching right as the market realized memory was becoming a major AI bottleneck turned out to be an ideal setup. Year-to-date performance reflects that. Even after a recent correction, DRAM was still up roughly 76% on a price return basis as of May 12th.

Roundhill has also moved quickly to support trading activity around the ETF. Options are already available on DRAM, which means investors can use strategies like covered calls to potentially monetize the elevated volatility.

Still, there are reasons to be cautious. Valuations across the memory sector have expanded aggressively, and concentration risk is significant when three holdings account for most of the portfolio. This is probably not going to be a forever hold for many investors.

Instead, DRAM looks more like a tactical vehicle for expressing a very specific view on one of the hottest themes in the market right now. On that front, though, it has absolutely delivered.

VistaShares Artificial Intelligence Supercycle ETF

AIS

-4.22%

DRAM is very much geared toward tactical traders chasing the memory theme directly. But if you are looking for a broader long-term thematic tilt toward AI infrastructure, I think AIS is the better option.

Like DRAM, AIS is actively managed. However, its approach is much broader. The ETF uses what VistaShares calls a “Bill of Materials” investment process, which essentially breaks down the AI supply chain into the inputs and outputs the investment committee believes are critical to the artificial intelligence buildout.

Instead of just focusing on the obvious winners, the portfolio attempts to identify the enabling infrastructure and components underneath the trend. That broader mandate results in a portfolio of 62 companies. It is more diversified than DRAM, though still fairly concentrated compared to broad technology ETFs.

What stands out to me is that AIS had already built meaningful positions in many of the eventual memory winners before the trade became obvious to the broader market. Notably, SK Hynix now makes up roughly 11% of the portfolio, while Micron Technology sits around 7.5%.

Performance has reflected that positioning. As of May 12th, AIS was up roughly 69% on a price return basis year-to-date, which puts it surprisingly close to DRAM despite attracting far less attention.

Assets under management are still relatively modest at about $5.5 million, especially compared to DRAM’s explosive growth. Still, the ETF has quietly captured many of the same winners without going as all-in on the pure memory trade.

The trade-off, of course, is cost. AIS charges a 0.75% expense ratio, which is typical for a concentrated actively managed thematic ETF. Liquidity is also not particularly strong at the moment. I’m currently seeing a 0.34% 30-day median bid-ask spread, which can become a noticeable drag for investors frequently trading in and out.

Still, compared to DRAM, I think AIS is much more suitable as a longer-term thematic allocation rather than a short-term momentum trade.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.