While the Kospi extends its bull run, foreign investor flows are concentrating on semiconductor stocks rather than the broader Korean market. US-listed exchange-traded funds (ETFs) tracking Korean equities have seen heavy outflows, while memory-chip ETFs with large holdings of Samsung Electronics and SK hynix are drawing inflows.
According to ETF CHECK on the 10th, the iShares MSCI Korea ETF (EWY) — a flagship US-listed fund investing in the Korean market — recorded net outflows totaling $1.0145 billion (about 1.4867 trillion won) from the 1st through the 7th of this month. EWY is a passive ETF holding Korea's largest-cap names, including Samsung Electronics, SK hynix, Hyundai Motor and SK Square, and is considered a representative vehicle for buying the Korean market as a basket.
In contrast to last month's net inflows, outflows have continued this month. The fund saw $150.4 million (about 220.41 billion won) in net outflows on the 1st, followed by $83.1 million (about 121.78 billion won) on the 4th, $172.8 million (about 253.24 billion won) on the 5th, and $109.2 million (about 160.03 billion won) on the 6th. Outflows accelerated on the 7th, when $409.3 million (about 599.83 billion won) exited in a single day. The pullback is seen as profit-taking after the Kospi surged past the 7,000 level.
Memory-chip ETFs, by contrast, have attracted concentrated inflows. The US-listed Roundhill Active DRAM ETF drew net inflows of $1.9538 billion (about 2.8633 trillion won) from the 1st through the 7th. SK hynix accounts for 25.94% of the ETF and Samsung Electronics 21.62%, bringing the two stocks' combined weight to roughly 48%. The ETF is distinctive in allocating its largest weights to Korea's big-cap semiconductor names. With Samsung Electronics and SK hynix not directly listed in the US, American investors seeking exposure to the two companies are channeling money into the fund.
Market watchers say foreign flows are rotating from the broader Kospi toward AI memory names. Expanding global AI investment is boosting expectations for demand for high-bandwidth memory (HBM) and server DRAM, highlighting the potential for earnings improvement at Samsung Electronics and SK hynix. Expectations of a memory cycle recovery are being reinforced as US Big Tech continues to ramp up AI infrastructure spending.
Analysts say the concentration of flows in AI-chip stocks with high earnings visibility may persist for some time. "The explosive growth of the AI industry is prompting a reassessment of the strategic value of Korea's semiconductor companies within the global supply chain," said Seol Tae-hyun, an analyst at DB Securities. "The concentration in large caps actually strengthens the index's downside resilience while enhancing the investment appeal of the Kospi."
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