To The Moon

The KOSPI hit a fresh record above 6,300 today. After gaining more than 75% in 2025, the index has climbed another roughly 46% in less than two months in 2026. Total market capitalization has surpassed $3.76 trillion, overtaking Germany and France to become the world’s ninth-largest equity market.

Related ETFs have also posted remarkable gains year-to-date: $iShares MSCI South Korea ETF(EWY)$ is up 53.15% year-to-date. Leveraged product $Direxion Daily MSCI South Korea Bull 3x Shares(KORU)$ has surged 232.02% year-to-date. $Franklin FTSE South Korea ETF(FLKR)$ has gained 50.92% year-to-date, while $Matthews Korea Active ETF(MKOR)$ has climbed 50.22% year-to-date.

The core sector driving the index's rise is semiconductors. Since 2026, Samsung has surged approximately 70% and SK Hynix has climbed about 66%, significantly outperforming the KOSPI's roughly 46% gain over the same period. With market capitalizations of over $800 billion and $500 billion respectively, these two companies collectively account for about 35% of the total market value of the Korean stock market, carrying extremely high weight. Consequently, the index's performance is highly correlated with the stock prices of these two firms.

HBM (high-bandwidth memory) is a premium memory product mainly used in AI servers and GPU-accelerated computing. Samsung Electronics and SK Hynix are the two leading global suppliers of HBM, with SK Hynix holding a leading share in HBM3 and HBM3E. As AI computing capacity expands, demand for HBM rises directly, making these two companies the most immediate beneficiaries of the surge in AI-related spending.

In addition, the AI equipment chain is closely linked to both firms. The core components of an AI server include GPUs, HBM, conventional memory chips and advanced packaging equipment. When AI capital expenditure increases, demand for complete servers and advanced packaging rises simultaneously, driving higher memory shipments. Korean equipment and materials companies supply wafer fabrication tools, packaging services and related materials to Samsung and SK Hynix, so gains in equipment stocks often move in tandem with expansion by the memory leaders.

On the policy front, South Korea’s National Assembly has advanced revisions to the Commercial Act, including a requirement for listed companies to cancel treasury shares. In the past, some conglomerates used treasury shares to reinforce control with relatively limited direct ownership. The new rule limits that mechanism, effectively increasing the proportional stake of free-float shareholders and improving capital structure and shareholder alignment.

Meanwhile, the US Supreme Court ruled on February 20 to strike down reciprocal tariff measures, reducing uncertainty for Korea’s export-driven companies. Foreign ownership in Korean equities has risen from around 27% to above 30%, with US investors accounting for a significant share of the incremental inflows.

Related ETFs:

$iShares MSCI South Korea ETF(EWY)$ has assets under management of approximately $17.56 billion, making it the largest broad-based Korea ETF. It charges a management fee of 0.59% and has gained 53.15% year-to-date. Its holdings primarily track fluctuations in the weightings of Samsung and SK Hynix.

$Franklin FTSE South Korea ETF(FLKR)$ has an AUM of approximately $535 million with a management fee of just 0.09%, offering a significant fee advantage. It has risen 50.92% year-to-date, making it suitable for long-term, low-cost allocation to the Korean market.

$Matthews Korea Active ETF(MKOR)$ ‘s asset is $107 million with a management fee of 0.79%. It has risen 50.22% year-to-date, participating in Korean structural opportunities through active stock selection.

Among leveraged options, $Direxion Daily MSCI South Korea Bull 3x Shares(KORU)$ has assets under management of approximately $1.04 billion with a management fee of 0.75%. It has surged 232.02% year-to-date, offering exceptional volatility and suitability for short-term trading investors.