Pace of asset growth picks up; products tracking domestic equities lead growth

A trader takes a phone call at Hana Bank’s dealing room at its headquarters in central Seoul, Thursday. (Yonhap)
A trader takes a phone call at Hana Bank’s dealing room at its headquarters in central Seoul, Thursday. (Yonhap)

Amid a buoyant domestic stock market, South Korea's exchange-traded fund market has seen a sharp rise in net assets, with the pace of growth accelerating further.

The total net assets of ETFs listed here stood at 354.74 trillion won ($246 billion) as of Monday, according to the Korea Financial Investment Association. The figure combines products that track domestic and overseas equities, as well as other underlying assets.

This marks an increase of nearly 50 trillion won in about a month, after crossing 300 trillion won on Jan. 5.

The figure had further risen to 356 trillion won as of Thursday. Of the total, 228 trillion won was invested in products tracking domestic assets, while 128 trillion won tracked overseas assets.

The local ETF market began in October 2002 with just four products, totaling 355.2 billion won in net assets. It took the market more than 20 years to surpass the 100 trillion won milestone in June 2023.

The pace, however, has since significantly accelerated. The market's net assets broke through the 200 trillion won mark two years later in June 2025. While it took seven months for the figure to exceed 300 trillion won in January, an additional inflow of over 50 trillion won came within a single month.

Products tracking local stock market indices such as the Kospi 200 and Kosdaq 150, as well as semiconductor-focused ETFs, have led the surge.

"The influence of ETFs on market flows is steadily increasing. We are seeing that rapid inflows into the ETF market are now stimulating broader index movements," said Shin Hyun-yong, a researcher at Yuanta Securities, adding that the growth is primarily led by ETFs tracking domestic equities.

"Funds flowing through the ETF channel are no longer just a supplementary driver of the market but they have become a major force in market supply and demand. As a result, the price momentum driven by ETF flows could expand even further."


silverstar@heraldcorp.com