$47B Asset Manager Trims TSMC and SK Hynix, Significantly Boosts India Exposure
Claire Weston
South Africa's Coronation slashed its emerging-market fund's TSMC + SK Hynix weighting from 8% to 5% and redirected the capital to India, lifting its India allocation to nearly 12% — a concrete sign that institutional doubts about AI-chip valuations have moved from sentiment to real portfolio action.
Who is selling, and how much?
Coronation manages $47 billion in total assets. The vehicle making the move is its $3.1 billion Global Emerging Markets fund.
In Q2 this year the fund cut its combined SK Hynix + TSMC weighting from roughly 8% (end-December) to about 5%.
This means → a three-percentage-point trim on a $3.1 billion fund is hundreds of millions of dollars in actual selling.
Why sell? What is wrong with chip stocks?
The fund managers' own words: "Most Taiwanese and Korean stocks now offer very little margin of safety, much like Indian stocks in 2024/2025."
In plain terms = margin of safety is the cushion between the price you pay and the stock's intrinsic value. The smaller it is, the harder the fall if earnings disappoint — and AI chip stocks have now priced in virtually all the good news.
SK Hynix has dropped nearly 40% from its June peak; South Korean regulators' crackdown on retail trading frenzy is adding further pressure.
Where is the money going? Why India?
India's market had sold off sharply on geopolitical and economic fears, creating what Coronation sees as a re-entry window.
The fund's India allocation has risen to just under 12%.
Specific picks: a fresh position in Mahindra (positioned as a turnaround play after a weak agricultural season and broader slowdown), plus added stakes in Bajaj Finance, HDFC Bank, and ICICI Bank.
This means → capital is rotating from "fully-priced, high-valuation chips" into "beaten-down, lower-valuation Indian financials and consumer names" — a textbook valuation rebalance.
Is Coronation alone in this?
No. Franklin Templeton's flagship emerging-market equity fund has also trimmed chip-maker exposure.
Franklin Templeton now favors Alibaba and Tencent over semiconductor names.
This reflects a broader institutional pattern: the chip-stock de-risking is not an isolated call but a sector-wide re-weighting across emerging-market capital.
What does this mean for ordinary investors?
When managers running tens of billions collectively label chip-stock safety margins "extremely low," retail investors need to re-examine the AI-chip share of their own portfolios.
In plain terms = the big money is already selling — not because AI is failing, but because all the good news is already in the price, leaving only downside-surprise risk.
The direction of the emerging-market rebalance — from chips toward India and Chinese internet — is the key variable to watch in the next phase.
Content is for reference only, not financial advice.