[Alpha Biz= Ellie Kim] Despite a powerful rally that pushed the KOSPI to near-record highs, U.S.-listed Korea-focused ETFs saw their largest-ever daily outflows, suggesting investors are beginning to lock in profits.

According to Bloomberg, the iShares MSCI South Korea ETF (EWY) managed by BlackRock recorded net outflows of $409 million (approximately KRW 600 billion) on June 6 alone—the largest single-day outflow since its inception. Over the past five trading sessions, cumulative outflows have exceeded $900 million.

EWY tracks major Korean equities including Samsung Electronics, SK Hynix, Hyundai Motor, and KB Financial Group, making it a key proxy for the Korean stock market. With heavy exposure to semiconductors, the ETF has been highly sensitive to the recent AI-driven surge.

Analysts attribute the outflows primarily to profit-taking following sharp gains. This year, Samsung Electronics and SK Hynix have surged approximately 126% and 154%, respectively, leading the broader market rally. Notably, the outflows occurred even as the KOSPI surged more than 6% on the same day, briefly surpassing the 7,500 level.

Todd Sohn, senior ETF strategist at Strategas Securities, said, “While Korea’s equity momentum remains strong, reducing exposure at these elevated levels can be a rational strategy amid overheating concerns.”

Short-selling activity is also showing signs of increasing. Data from S3 Partners indicates that some investors are expanding bearish positions, betting on a potential correction after the recent sharp run-up.

The KOSPI later closed at 7,498, up 0.11% on the day, marking yet another record high. Market participants say the current environment reflects a dual dynamic of continued rally momentum alongside growing profit-taking pressure.

 

 

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