If semiconductor performance is not good, funds will flow out… “It will shake the stock market”
The net asset size of the exchange traded fund (ETF) market has exceeded 400 trillion won. Due to the rise in Samsung Electronics and SK Hynix stock prices, funds also poured into related ETFs, creating the largest market in history. However, securities companies warned that if negative issues related to semiconductors, which have grown the ETF market, arise, the withdrawal of funds from the ETF market, where funds have been concentrated, could accelerate, which could in turn increase stock market volatility.
According to a report released by BNK Investment & Securities on the 3rd, changes in supply and demand are occurring in the domestic stock market, centered on ETFs. According to the Korea Financial Investment Association, the ETF market increased by 123.6 trillion won in one year, from 173.6 trillion won at the end of 2024 to 297.1 trillion won at the end of 2025, based on the set amount. As of the end of April this year, the set amount was 431.4 trillion won, an increase of 134.2 trillion won compared to the end of last year, which exceeds the entire fund inflow in 2025.
BNK Investment & Securities pointed out, “The ETF set amount in April 2025 was 191.4 trillion won, but it increased by 240 trillion won in exactly one year.”
As such, the Korean ETF market is showing a clear increase. Until August of last year, this increase was due to expectations for revitalization of capital market policies due to the presidential election, but from September of last year, the rise in semiconductor prices appears to have had a significant impact. BNK Securities analyzed, “It overlaps with the period when Samsung Electronics and SK Hynix were experiencing explosive profit growth,” and added, “It is highly likely that the recent ETF fund inflow was mainly focused on semiconductors.”
The growth of the ETF market is having a positive impact on the overall supply and demand in the Korean stock market. However, it is worth noting that the ETF set amount in March decreased by 26.9 trillion won as uncertainty in the financial market increased due to the Iran war. In addition, if there is a negative issue related to semiconductors that led to the inflow of funds into the ETF market, there is a possibility that funds will flow out rapidly. BNK Investment & Securities pointed out, “In situations where the semiconductor performance outlook is good, an inflow of funds can be expected, but in the opposite case, the outflow of funds may accelerate.” In other words, the ETF market can be a factor that increases stock market volatility.
He continued, “The fact that the market capitalization of KOSPI and KOSDAQ exceeded 600 billion won, rising again by 217% compared to nominal GDP, is a factor that can increase the price burden.” BNK Investment & Securities added, “The rapid inflow of funds into ETFs is having a positive effect on the stock market, but the bond market is having the side effect of a sharp rise in government bond yields as the entire demand base is shaken.”
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