Quantum Computing ETFs and Google
Diversification Matters More Than Single-Stock Bets
Quantum Computing ETFs: Korea-Listed vs. U.S.-Listed
Stocks related to quantum computing have surged sharply. Although recent sessions have seen heightened volatility following steep rallies, performance since October has been extraordinary: IonQ is up 372%, Rigetti 1,299%, D-Wave Quantum 729%, and Quantum Computing Inc. 2,686%. Market attention accelerated further after Google announced the performance of its quantum computing chip, Willow, on the 9th. Investors remain divided—some argue the sector is still in its infancy, while others see it as the next major theme after AI. Still, with quantum computing selected as one of the key themes at CES, the world’s largest consumer electronics show to be held early next year in the U.S., perceptions that it belongs only to the distant future appear to be shifting.
Quantum computers equipped with Google’s Willow chip reportedly solved in five minutes a computation that would take a conventional supercomputer 10 septillion years (10²⁵ years) to complete. Traditional computers store information in units called bits, which represent either “0” or “1.” Quantum computers use qubits, a term combining “quantum” and “bit.” Under the principles of quantum mechanics, qubits can exist as both “0” and “1” simultaneously—a property known as quantum superposition. This characteristic dramatically enhances efficiency in finding optimal solutions.
For example, if there are 100 possible routes to reach a destination, a classical computer would simulate each route sequentially before selecting the fastest. A quantum computer, by contrast, evaluates all 100 routes simultaneously to identify the optimal path. In general, a quantum computer can process 2ⁿ possibilities in parallel, where n is the number of qubits. Google’s Willow chip consists of 105 qubits.
There are two primary approaches to quantum computing: superconducting and trapped-ion technologies. Trapped-ion systems leverage the stability of ions at the atomic level and can operate in near-room-temperature vacuum environments. Superconducting systems, meanwhile, offer faster processing speeds and compatibility with existing semiconductor infrastructure, but require ultra-low temperatures near –273°C and historically suffer from higher error rates.
Google’s quantum computers are based on the superconducting approach. As the number of qubits increases, error rates typically rise. However, alongside the Willow chip, Google published results in the journal Nature showing a dramatic reduction in error rates even as qubit counts increase. This development potentially erodes the traditional advantage of trapped-ion systems, which have been regarded as more stable.
Market reactions were swift. In the three trading days following Google’s announcement, Alphabet shares rose 9.46%, while IonQ—representing the trapped-ion approach—fell 12.41%. That said, trapped-ion technology is also advancing rapidly, and it remains unclear which approach will ultimately dominate commercialization. For this reason, investing in a single quantum computing stock carries significant risk.
Currently, ETFs explicitly labeled with the “quantum computing” theme include KOSEF U.S. Quantum Computing (498270) in Korea and Defiance Quantum ETF (QTUM) in the United States. The KOSEF ETF was listed on December 17, while QTUM has been trading since September 2018. Given that the industry is still at an early stage, the number of available products remains limited.
The KOSEF ETF holds 20 stocks, with the top five capped at 8% each during periodic rebalancing. In practice, however, sharp price gains have pushed IonQ’s weight to around 28%. Since the ETF rebalances semiannually in May and November, IonQ’s allocation is expected to be reset to 8% in May 2025.
The QTUM ETF invests in 71 stocks on an equal-weight basis. Like KOSEF, recent rallies had temporarily boosted the weights of key names such as Rigetti (12.46%), D-Wave Quantum (11.77%), and IonQ (5.04%). However, during its semiannual rebalancing on December 20—coinciding with U.S. options expiration—all holdings were adjusted back to roughly 1.5% each.
ETFs are designed to provide diversified exposure to the core players within a specific industry or theme. Compared with single-stock investments, they help mitigate volatility and reduce company- or technology-specific risks. As discussed, quantum computing is a theme where diversification is particularly important. While additional competing ETFs may emerge over time, investors should pay close attention to portfolio composition, weighting methodology, and rebalancing schedules when selecting products.