Net assets of domestic equity exchange-traded funds (ETFs) have surpassed 200 trillion won as the KOSPI continues to hit record highs. Domestic equity ETFs now account for 3.5% of the KOSPI's market capitalization, the highest share on record.
According to financial information provider FnGuide on Monday, net assets of domestic equity ETFs stood at 212 trillion won as of the 7th, crossing the 200 trillion won mark for the first time. Domestic equity ETFs invest in companies listed on local markets such as the KOSPI and KOSDAQ. ETFs are classified into domestic equity, overseas equity, domestic bond, and domestic hybrid categories. Of the 1,099 ETFs available, 413 are domestic equity products.
Net assets of domestic equity ETFs have grown sharply over the past one to two years. Through the end of 2024, when the KOSPI was stuck in the mid-2,000 range, the figure stood at just 40 trillion won. It rose to 93 trillion won last year as the index began rising in earnest, and has more than doubled within four months this year. The ratio to the KOSPI's total market capitalization of 6,138 trillion won reached a record 3.47%, up from 2.08% in December 2024.
Domestic ETFs accounted for 46.6% of all ETFs, roughly half of the total. That share stood at 55.3% at the end of 2021, but fell to 24.3% by the end of 2024 as U.S. equities rallied and the Korean market stagnated, with funds flowing into overseas equity ETFs. Since then, the KOSPI has posted the steepest gains among major global indexes, driving a rapid increase in the share of domestic equity products. ETFs offer diversification benefits, making them popular among investors reluctant to bet on individual stocks.
The KOSPI has risen about 78% this year, the biggest gain among major global stock indexes. The index has sustained its momentum despite Middle East risks, long regarded as the biggest variable for the Korean market. The KOSPI broke through the 7,000 level for the first time on the 6th and closed at 7,498.00 on the 8th, approaching a close above 7,500.
