BlackRock's iShares MSCI South Korea ETF (ticker: EWY) received a record $2.8 billion in net inflows last week, according to Bloomberg. The weekly total—driven by $800 million on the 14th and $1.1 billion on the 15th—more than doubled the previous record of $1.2 billion set in February. Malcolm Dawson, BlackRock's Global ETF Senior Portfolio Manager, attributed the surge to investor confidence in Korean technology firms' fundamentals despite recent stock price declines and global market volatility. The inflow coincides with SK Hynix American Depositary Receipts (ADRs) trading at a premium to Korean shares; EWY allocates approximately 25% of its portfolio to SK Hynix, prompting some analysts to view the ETF as an indirect route to the stock.
BlackRock Korea ETF Records $2.8 Billion Weekly Inflow
BlackRock's iShares MSCI South Korea ETF received $2.8 billion (approximately 4.1 trillion won) in net inflows last week, marking the largest weekly total on record. The previous high of $1.2 billion was recorded in February. Inflows on the 14th and 15th—totaling $800 million and $1.1 billion respectively—accounted for the majority of the week's capital movement.
Malcolm Dawson, Global ETF Senior Portfolio Manager at BlackRock, stated that while stock prices have declined somewhat, fundamentals remain solid. He noted there is little disagreement that the recent restructuring of supply and demand dynamics will support Korean technology companies.
SK Hynix ADR Premium Drives Indirect Positioning Strategy
EWY allocates approximately one-quarter of its portfolio to SK Hynix shares listed on the Korean stock market. Some analysts interpret the record inflow as a strategy to acquire SK Hynix exposure indirectly, given that SK Hynix ADRs listed on U.S. exchanges trade at a significant premium to the Korean-listed shares.
However, Hasnain Malik, Head of Emerging Markets Equity Strategy at research firm Tellimer, suggested the trend extends beyond SK Hynix positioning. He stated that while the ADR listing may have intensified focus on the Korean market, few investors are unaware that Korean stocks have delivered the highest returns globally over the past year.
Emerging Market ETFs Attract $4.39 Billion in Weekly Flows
Emerging market ETFs listed on U.S. exchanges—including the Korea-focused fund—received a combined $4.39 billion in net inflows last week. The previous week had seen $78.5 million in net outflows. Last week's inflow total was the largest since February 27. Year-to-date, emerging market ETFs have accumulated $45.1 billion in net inflows.
FAQ
What amount did BlackRock's Korea ETF receive in net inflows last week?
BlackRock's iShares MSCI South Korea ETF (EWY) received $2.8 billion in net inflows last week, more than doubling the previous weekly record of $1.2 billion set in February.
Why are investors directing capital into the BlackRock Korea ETF?
Malcolm Dawson of BlackRock attributed the inflows to investor confidence in the solid fundamentals of Korean technology companies despite recent stock price declines and global market volatility. Some analysts also cite the ETF's 25% allocation to SK Hynix as a factor, given that SK Hynix ADRs trade at a premium to Korean-listed shares.
How much capital flowed into emerging market ETFs last week?
Emerging market ETFs listed on U.S. exchanges received a combined $4.39 billion in net inflows last week, the largest weekly total since February 27. Year-to-date inflows into emerging market ETFs total $45.1 billion.
