U.S.-listed South Korea ETFs are under pressure after the country's stock market extended its sharp selloff, highlighting how investors in these funds are increasingly exposed to the fortunes of the artificial intelligence trade rather than the broader Korean economy.
The benchmark Kospi Index plunged as much as 9.8% on Wednesday, triggering a market-wide circuit breaker for a second straight session.
The index briefly fell below the 6,000 mark, its lowest level since early April, and is now on track for a record monthly decline of about 35%.
From its peak a month ago, the Kospi has lost roughly 40%, reversing a world-beating rally led by memory chip giants SK Hynix Inc (NASDAQ:SKHY) and Samsung Electronics.
Three ETFs, Three Ways to Play South Korea The iShares MSCI South Korea ETF (NYSE:EWY) remains the dominant U.S.-listed vehicle for Korean equities, managing more than $23 billion in assets.
