Funds Flow into Large-Cap Semiconductors and Domestic ETFs Amid Market Recovery
A notable return of capital from overseas equities to the domestic stock market is driving significant inflows into major semiconductor stocks and representative index ETFs in Korea. Over half of the new funds entering through RIA accounts have been allocated to ETFs and semiconductor-related assets, reflecting investors’ preference for tax benefits and market stability. In particular, blue-chip names such as Samsung Electronics and SK Hynix, along with index products like KODEX 200, are attracting heightened investment interest.
With easing geopolitical risks in the Middle East, capital has accelerated its shift into domestic equity ETFs, pushing total ETF assets under management from 393 trillion KRW to 395 trillion KRW and setting the stage for a near-term break above 400 trillion KRW. Robust earnings from Samsung Electronics have further fueled demand for semiconductor ETFs, while capital withdrawing from overseas equities is seen as a positive catalyst for the Korean market.
Investors are diversifying their strategies to manage volatility, increasing allocations to high-dividend, covered call, and strategic ETFs, as well as inverse ETFs for downside protection. Analysts anticipate that as long as regional tensions remain subdued, the ETF market is set for continued growth, although lingering Middle East risks warrant ongoing vigilance.
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