Why South Korean ETFs Are Soaring in 2025

At the same time, sentiment improved sharply after officials in Seoul and Washington described “substantive progress” in resolving tariff disputes. According to Kim Yong-beom, the presidential chief of staff for policy, most issues have now been settled, and a deal could be finalized before the APEC summit later this month. Those remarks helped the won stabilize around 1,420 per dollar and lifted industrials, shipbuilders, and biotech names across the KOSPI.

What’s Fueling ETF Momentum Since May?

The rally in South Korean ETFs has been driven by three intertwined factors: a recovering export cycle, targeted fiscal support, and strong corporate earnings from tech leaders.

First, semiconductor exports, the backbone of South Korea’s trade engine, have rebounded sharply, aided by global demand for AI-related hardware and data infrastructure. SK Hynix and Samsung Electronics have both reported rising orders for high-bandwidth memory chips, while capital spending in the sector remains elevated.

Second, fiscal policy has turned expansionary. Two supplementary budgets passed this year have injected liquidity into the domestic economy, while the Bank of Korea has remained cautious, holding its policy rate steady at 3.5%. Inflation, at 2.2% in June, has stayed close to target, allowing room for possible easing if growth moderates later in the year.

Finally, South Korean firms are leveraging global partnerships to diversify growth. Samsung’s USD 110 million investment in U.S. biotech firm Grail and Hyundai’s joint energy projects have reinforced investor confidence in Korea’s ability to adapt to global industrial shifts.

Which ETFs Are Capturing This Momentum?

South Korea ETFs are among the top-performing country exposures globally this year. The group advanced 3.3% over the past week and 51.9% year-to-date, with total assets under management reaching €2.36 billion and cumulative inflows of €346 million in 2025.

Top South Korea ETFs:

• Franklin FTSE Korea UCITS ETF (FLXK) – Up 5.16% this week and 69.9% year-to-date, supported by strong performance from Samsung and Hyundai shares.
• HSBC MSCI Korea Capped UCITS ETF (HKOD) – Gained 5.52% this week and 72.8% year-to-date, recording over €102 million in monthly inflows.
• iShares MSCI Korea UCITS ETF USD (Dist) (IDKO) – Rose 4% this week and 73.3% year-to-date, with steady foreign buying from European investors.
• iShares MSCI Korea UCITS ETF USD (Acc) (CSKR) – Also up 4% this week and 73.3% year-to-date, benefiting from its compounding dividend structure.
• Amundi MSCI Korea UCITS ETF (KRW) – Advanced 3.23% this week and 54% year-to-date, with exposure to industrial and energy exporters.
• Xtrackers MSCI Korea UCITS ETF (DBX8) – Added 4% this week and 73.1% year-to-date, maintaining positive flows through October.

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