Foreign Investors Sell 199 Trillion Won in Korean Stocks While Buying 9.7 Trillion Won in ETFs

An electronic board displays the KOSPI and KOSDAQ indexes and global oil prices at Hana Bank's headquarters in Jung-gu, Seoul, on Oct. 13, 2026 Foreign investors have continued to accumulate exchange-traded funds (ETFs) listed in South Korea even as they sold nearly 200 trillion won, or approximately $149.54 billion, worth of individual stocks on the benchmark KOSPI market this year, highlighting a divergence in their investment strategies. The contrasting flows suggest that foreign investors are reducing their exposure to individual stocks while maintaining selective market exposure through ETFs, rather than withdrawing from investment products listed in South Korea altogether. According to Korea Exchange data released on Oct. 13, foreign investors recorded net sales of 199.10 trillion won in the KOSPI market, excluding ETFs and similar products, between Jan. 2 and Oct. 12. Foreign investors were net sellers in every month except January and April, recording five consecutive months of net selling from May through September. Their net sales reached 8.46 trillion won in October alone through Oct. 12. Selling was concentrated in major semiconductor stocks, particularly SK hynix and Samsung Electronics. SK hynix recorded the largest foreign net selling during the period at 87.14 trillion won, followed by Samsung Electronics at 86.06 trillion won. Combined net sales of the two companies exceeded 173 trillion won. Hyundai Motor and SK Square were also among the most heavily sold stocks, recording foreign net sales of 11.39 trillion won and 7.34 trillion won, respectively. Lee Jae-won, an analyst at Yuanta Securities, said that despite Samsung Electronics' third-quarter operating profit exceeding market expectations and continued strength in AI infrastructure investment, persistent foreign selling has contributed to the KOSPI's relative underperformance. Samsung Electronics' shares fell to 250,500 won as of Oct. 12 amid foreign selling pressure, despite the company's stronger-than-expected preliminary earnings announcement on Oct. 8. Foreign investors, however, have taken a markedly different approach to ETFs. Their net purchases of domestically listed ETFs totaled 9.66 trillion won between the beginning of the year and Oct. 12. They maintained an uninterrupted monthly net buying streak from January through September, contrasting sharply with their selling of individual KOSPI stocks. During the first half of the year, foreign investors made their largest net purchases in TIGER MSCI Korea TR, an ETF tracking major Korean equities, with purchases totaling 1.74 trillion won. Other popular products included KODEX SK Hynix Single Stock Leverage and TIGER US NASDAQ 100. From July onward, as the KOSPI underwent a correction, foreign buying increasingly shifted toward index-tracking products, including KODEX Leverage and KODEX 200. Market analysts interpret the divergence as a change in investment strategy rather than a wholesale retreat from Korean-listed investment products. Lee Sang-hyun, an analyst at Meritz Securities, said foreign capital had yet to return to individual stocks but was flowing into ETFs targeting previously underperforming sectors, including semiconductors, financials and nuclear energy. He described the trend as a shift in the form of investment holdings or a rotation among stocks and sectors. Foreign ownership of domestically listed equity ETFs has also remained above its historical average this year. After starting the year below the 16-year average of 2.75%, foreign ownership climbed to 6.5% in June before easing to approximately 4.3% at the end of September, still exceeding the long-term average. Foreign investors have also purchased both leveraged and inverse ETFs this month, pointing to a more diversified approach to positioning amid heightened market volatility.