Kim Bo-young, a senior researcher at South Korea's Capital Market Research Institute, published a report on May 18 calling for asset management companies to strengthen their stewardship activities as the country's exchange-traded fund (ETF) market reached 500 trillion won in scale. The report highlighted that as of May, domestic ETFs held 53 trillion won in Samsung Electronics (2.9% of its market capitalization) and 58 trillion won in SK Hynix (3.5% of its market capitalization), positioning asset managers as structurally influential shareholders. South Korea's ETF net assets surged from 100 trillion won in June 2023 to 500 trillion won by May 2026, while the ETF market capitalization ratio in the KOSPI and KOSDAQ markets increased from 2.2% at the end of 2020 to 7.5% by the end of 2025.
South Korean ETF Market Reaches 500 Trillion Won by May 2026
The report documented the explosive growth trajectory of South Korea's ETF market. Net assets exceeded 100 trillion won in June 2023, then crossed 200 trillion won in May 2025, 300 trillion won by the end of the same year, and reached the 500 trillion won milestone by May 2026. Asset management companies' total stock holdings doubled from 100 trillion won at the end of 2020 to 207 trillion won by the end of 2025. Due to the nature of passive ETFs that track market-capitalization-weighted indices such as the KOSPI 200, asset managers' stakes in top-tier companies increased mechanically.
Asset Management Companies Show Limited Stewardship Practices
Kim noted that despite asset managers' structural position to exert significant influence on corporate governance, their actual stewardship activities remain limited. The researcher stated that for passive funds unable to freely sell specific stocks, corporate engagement and voting rights exercise represent the only core means to enhance corporate value. However, domestic asset managers lack adequate systems to verify and disclose such activities. Some asset managers routinely cite reasons such as "minimal impact on shareholder meetings" or "no concern of shareholder rights infringement" when declining to exercise voting rights. The report also pointed to severe disparities among asset managers in terms of dedicated organizational structures, personnel, and decision-making systems.
BlackRock Conducted 2,373 Corporate Engagements in 2025
The report contrasted domestic practices with those of global asset managers. BlackRock, the world's largest asset manager, utilized its index fund assets to conduct 2,373 corporate engagements across 42 countries, held dialogues with 1,811 companies, exercised voting rights more than 16,500 times, and participated in voting on over 154,000 agenda items in pursuit of long-term corporate value enhancement.
National Pension Service Strengthens Stewardship Evaluation Criteria
Domestic regulatory conditions are gradually changing. The National Pension Service significantly strengthened qualitative evaluation indicators related to shareholder rights exercise and stewardship activities when selecting commissioned asset managers. Policy authorities introduced a new inspection item for institutional investors' corporate value enhancement engagement activities through a stewardship code enhancement plan at the end of the previous year. Kim stated, "Domestic asset management companies must establish high-level corporate engagement and voting rights systems commensurate with their massive shareholding scale," adding, "Now is the time to tighten conflict-of-interest management systems and internal controls to lay the foundation for responsible shareholder activities."
FAQ
How large is South Korea's ETF market as of May 2026?
South Korea's ETF market reached 500 trillion won in net assets as of May 2026, growing from 100 trillion won in June 2023.
What stakes do domestic ETFs hold in Samsung Electronics and SK Hynix?
As of May, domestic ETFs held 53 trillion won in Samsung Electronics, representing 2.9% of its market capitalization, and 58 trillion won in SK Hynix, representing 3.5% of its market capitalization.
What stewardship activities did BlackRock conduct?
BlacklRock conducted 2,373 corporate engagements across 42 countries, held dialogues with 1,811 companies, and exercised voting rights more than 16,500 times, participating in over 154,000 agenda items.
