Exchange-traded funds (ETFs) focused on South Korea are experiencing a broad upswing. As of the latest update, the TR Korea ETF (02848) has climbed 3.09% to HKD 2,200. The E Fund Asia Semiconductor ETF (03486) has risen 2.97% to HKD 24.26, while the CSOP Hong Kong & Korea Technology ETF (03431) is up 1.17% to HKD 12.07.

Market Catalysts and Analyst Outlook

The positive movement follows a milestone for the South Korean stock market. On June 18th, the KOSPI index surged over 2% during the session, surpassing the 9,000-point level for the first time in its history. In a recent development, Goldman Sachs has revised its target for the KOSPI index upwards from 9,000 points to 12,000 points. This upgraded forecast is primarily based on robust corporate earnings growth and the strong, long-term fundamentals of the memory semiconductor sector, which is a core component of the index.

Goldman Sachs analysts noted that while there are market concerns about the sustainability of high profits for memory chip companies, they anticipate the current industry upcycle will last significantly longer than previous cycles. This extended duration is a key factor supporting their bullish stance on the market.

Insights on Capital Flows

Separate analysis from Shenwan Hongyuan has previously highlighted nuances in tracking foreign investment into South Korean equities. The firm pointed out that data on foreign capital flows from the Korea Exchange (KRX) may not fully align with figures from EPFR Global. A significant portion of foreign investment enters the South Korean market through ETFs, and these substantial inflows are not entirely captured by the exchange's transaction data. Notably, a major wave of foreign capital entered the Korean stock market in the first quarter of 2026. According to EPFR data, both passive domestic funds and passive foreign funds are the primary drivers of capital into South Korean stocks, with foreign ETF investments being a major source of these inflows.