Foreign investors sold the largest amount of an exchange-traded fund with exposure to major South Korean firms in August, industry data showed Monday, amid ongoing uncertainties in the global economy.
Investors yanked a net $310 million from the iShares MSCI Korea Capped ETF last month, a fund that has exposure to large and mid-sized South Korean firms, according to the data.
The outflow marks the largest amount since the fund was first launched in May 2000, the data showed.
An ETF refers to an investment fund traded on stock exchanges and represents a basket of stocks that reflects an index.
The iShares MSCI Korea Capped ETF, operated by U.S.-based BlackRock Fund Advisors Co., is a global fund whose net worth accounts for more than 90 percent of global ETFs with exposure to South Korean companies.
During the first 15 days of this month, investors of the ETF also dumped a net $170 million, and the net worth of the fund was reduced to $3 billion, down 38 percent from the $4.9 billion tallied in August last year, the sources said.
“Between June and September, the net sell-off by foreign investors in the local ETF market took up 20 percent of their total net sales in the South Korean securities market,” said Choi Seong-rak, a researcher at the Korea Center for International Finance.
“Net sales in ETFs by foreigners have been taking up a larger portion recently, so a closer monitoring of the situation is necessary,” he said. (Yonhap)
