The share of domestic equity exchange-traded funds (ETFs) in Korea's ETF market has topped 50% for the first time. As the KOSPI broke above the 9,000 mark for the first time ever and the domestic stock market stayed strong, investor money concentrated in domestic equity products.
On the 21st, according to FnGuide, as of the 18th, Korea's ETF market net worth aggregates totaled 527.0508 trillion won. Of that, domestic equity ETF net worth was 263.5401 trillion won, accounting for 50.0%, or about half of the total.
It is the first time the domestic equity ETF share has exceeded 50% since the size of Korea's ETF market topped 100 trillion won.
As recently as the end of 2024, domestic equity ETFs stood at 40 trillion won in net worth with a 24.3% share. At the time, they lagged well behind overseas equity ETFs, which had a 32.7% share. However, buoyed by the KOSPI rally that began in the second half of last year, net worth rose to 93 trillion won by year-end, and in January this year they surpassed overseas equity ETFs for the first time.
The upward trend then steepened. By the end of February this year, the share had expanded to 43.0%, and in about four months it broke through 50%. By contrast, the share of overseas equity ETFs fell to 26.7% from 32.7% at the end of last year.
The gap in net worth size also widened sharply. As of the 18th, overseas equity ETF net worth was 141 trillion won, leaving a 122 trillion won gap with domestic equity ETFs.
Behind the growth of domestic equity ETFs is the strength of the KOSPI. The KOSPI closed at 9,063.84 on the 18th, up from 4,214.17 at the end of last year, topping the 9,000 mark for the first time ever. The gain comes to 115%.
In particular, strength in semiconductor stocks centered on Samsung Electronics and SK hynix propelled the expansion of the ETF market. Recently, as money flowed into domestic equity ETFs with high weights in semiconductor and artificial intelligence (AI) names, net worth grew rapidly.
Bond ETFs, by contrast, were relatively sluggish. As of the 18th, domestic bond ETF net worth was 63.483 trillion won, up just 2.6% from the end of last year. Their share of the overall ETF market also shrank to 12.0% from 20.8% over the same period.
Analysts say this reflects investors' funds moving into risk assets amid a strong stock market, and bond prices weakening as inflation has picked up recently and the possibility of a benchmark rate hike has come to the fore.