On May 12, iShares MSCI South Korea ETF (EWY) fell 5.44% in pre-market trading, trading at $183.23/share, with trading volume of $7.24 million. The decline follows a historic wave of capital withdrawals from Korean equity products after the Kospi index surged over 80% year-to-date, leading all major global indices.
BlackRock's iShares MSCI South Korea ETF, with nearly $23 billion in assets, recorded $970 million in net outflows last week — the largest single-week redemption in the fund's history. The triple-leveraged Direxion Daily MSCI South Korea Bull 3X ETF also saw $240 million in outflows over the same period, ending what had been a sustained stretch of strong inflows into this key Asian AI-linked market. Meanwhile, bearish positioning has intensified — according to S3 Partners data, short interest in the fund rose to 14.81%, the highest level since February 19, reflecting growing expectations of a pullback as profit-taking accelerates.
The fund generally invests at least 80% of its assets in the component securities of the MSCI Korea Index, a free float-adjusted market capitalization-weighted index designed to measure the performance of large- and mid-cap Korean equities. The fund is non-diversified.
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