Record Inflow of Funds Into BlackRock's South Korean Stock ETF

▲ An SK Hynix advertisement displayed on a billboard in Times Square, New York

Bloomberg reported on July 20 (local time) that the world's largest asset manager, BlackRock, has seen a record-breaking influx of funds into its South Korean stock exchange-traded fund (ETF).

The iShares MSCI South Korea ETF (EWY), managed by BlackRock, saw a net inflow of 2.8 billion dollars (approximately 4.1 trillion won) last week alone, bringing its total assets under management to approximately 22.4 billion dollars.

In particular, the fund experienced a significant surge in capital, with 1.1 billion dollars flowing in on July 15 and 800 million dollars on July 14.

This weekly net inflow is the largest on record, more than double the previous high of 1.2 billion dollars set in February of this year.

Bloomberg analyzed that despite the recent increase in stock market volatility, investors continue to maintain strong sentiment toward companies related to artificial intelligence (AI).

Malcolm Dawson, a senior portfolio manager for BlackRock's global ETFs, assessed that "while stock prices have fallen somewhat, the fundamentals of the companies remain solid," adding that "there is a market consensus that the recent changes in supply and demand will act positively for South Korean technology companies."

Some in the market point to the recently listed SK Hynix American Depositary Receipts (ADRs) on the U.S. stock market as the backdrop for this capital inflow.

EWY invests approximately 25% of its total portfolio in SK Hynix stock.

The analysis suggests that as the price of SK Hynix ADRs traded in the U.S. market has formed at a higher level than the domestic shares, demand has increased among investors looking to invest in SK Hynix indirectly through the ETF.

However, there are also forecasts that this capital inflow will not be limited to simply buying SK Hynix indirectly.

Hasnain Malik, head of emerging market equity strategy at research firm Tellimer, explained that "the listing of SK Hynix ADRs may have further heightened interest in the Korean market," but added that "the fact that the Korean stock market has recorded the highest returns among major global markets over the past year is already widely known."

Meanwhile, emerging market ETFs listed on the U.S. stock market saw a total net inflow of 4.39 billion dollars last week.

This is a significant turnaround from the net outflow of 78.5 million dollars the previous week.

The net inflow volume last week was the largest since February 27, and the cumulative net inflow for emerging market ETFs so far this year has reached 45.1 billion dollars.

(Photo: Yonhap News)

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