Foreign capital sold a whopping 17 billion US dollars in March, but this fund went against the trend and sang a different tune: South Korean semiconductor stocks are experiencing a "very good buying opportunity."

A top-performing fund has pointed out that despite a recent rebound, the valuation of South Korean storage chip stocks remains attractive; if the situation in the Middle East continues to ease, these stocks are expected to lead the rebound. Arjun Jayaraman, fund manager at Causeway Capital Management, said that leading chip companies such as Samsung Electronics and SK Hynix will benefit the most from the process of Iran moving towards a resolution. The $3.4 billion emerging markets fund he manages has outperformed 96% of its peers over the past three years. Jayaraman said in an interview, "The technology sector, especially tech stocks in South Korea and Taiwan, have been severely impacted before, but now they are expected to rebound as global tensions stabilize." He noted that despite a rise in related stocks on Wednesday after Trump announced the US would withdraw from Iran in two to three weeks, the valuation still remains "extremely attractive." Jayaraman's optimistic outlook on South Korean storage chip manufacturers contrasts sharply with the stance of some investors who have been selling Korean stocks during the Iran conflict. In March of this year, foreign investors sold a net of $17 billion worth of Samsung Electronics and SK Hynix stocks, leading to a 23% and 24% drop in the two individual stocks, respectively, marking the largest monthly decline since at least 2008. Jayaraman believes that when the situation in the Middle East "returns to some degree of normalcy," foreign funds will "undoubtedly" flow back in. "We see this sell-off as more of a buying opportunity, so we have not sold these stocks," he said. "For Korean stocks, especially SK Hynix, this sell-off provides a very good buying opportunity." To hedge against the risk exposure in the Asian tech sector (primarily concentrated in energy importing countries), Jayaraman's fund has also increased its holdings in some energy stocks such as Petrochina (00857) over the past month. He added, "In the long term, we still very much favor the artificial intelligence theme. We see this sell-off as more of a buying opportunity, so we have not reduced our positions in any related assets."