Goldman Sachs Chief Asia-Pacific Equity Strategist Tim Moe raised the firm’s Kospi target to 12,000, an implied roughly 90% upside even as the Korean market absorbs a violent unwind of leveraged retail products. “Our conviction level in the stronger for longer cycle is really strong, very high.”
The call landed amid a genuine near-term storm. Korean leveraged ETF assets under management peaked at roughly $53 billion in June, collapsed to a low of about $14 billion on Thursday, and have since recovered to about $24 billion as retail investors faced margin calls and regulators tightened the screws on leveraged products. Korea’s 10-day volatility ran near 100% last week, well beyond most institutional risk budgets. The two most accessible US-listed vehicles for expressing a Korea view moved with that turbulence: iShares MSCI South Korea ETF (NYSEARCA:EWY) is down 11.05% over the past month but still up 64.82% year to date, while Franklin FTSE South Korea ETF (NYSEARCA:FLKR) has posted a similar 10.75% one-month drawdown against a 65.29% year-to-date gain.
Moe’s Fundamental Case
Moe’s argument rests on valuation and an earnings ramp tied to the AI capex cycle. “The market today is trading at five point one times current consensus 12 month earnings. Those earnings this year are growing we think 32%. Next year we think the numbers will be 35%.” He noted the 5x forward multiple sits roughly two standard deviations below historical norms, and framed the 12,000 Kospi target as implying an 8x forward multiple on projected 2028 earnings.
The Korean market’s composition explains why Moe emphasizes semiconductors. Over 50% of the Kospi is the semiconductor sector, tied directly to the AI infrastructure buildout that Goldman’s own 2026 outlook has flagged as the dominant global earnings engine. Defense is Moe’s second pillar. “The key takeaway is earnings. If earnings come through at current valuations, you have to be very bearish when you are out in order not to think the market will be higher.”
EWY: The Semiconductor-Heavy Way to Play It
EWY is the largest and most concentrated US-listed vehicle mapped to Moe’s thesis. Per its most recent NPORT filing as of May 31, 2026, the fund holds SK Hynix at 30.85% of net assets and Samsung Electronics at a combined 23.94% (common plus preferred). Together those two AI-memory bellwethers make up 54.74% of the fund. Total net assets sit at $24.14 billion. Automotive (Hyundai, Kia), financials (KB, Shinhan, Hana), and internet (NAVER) round out the exposure.
FLKR: A More Diversified Version of the Same Bet
FLKR carries similar Korean equity exposure with less semiconductor concentration. As of March 31, 2026, SK Hynix accounts for 19.30% and Samsung Electronics for a combined 19.68%, with the balance spread across roughly 6.5% in defense and aerospace (Hanwha Aerospace, Korea Aerospace, HD Hyundai Heavy Industries, Samsung Heavy Industries), around 7% in financials, and meaningful weights in biotech (Celltrion, Samsung Biologics) and internet (Naver, Kakao). Total net assets are $420.78 million, a much smaller fund than EWY.
The mechanical distinction matters. Samsung Electronics and SK Hynix trade on the Korea Exchange, not a US venue, which is why ETFs are the practical route for a US investor. EWY leans harder into the semiconductor thesis Moe emphasizes. FLKR captures the defense-industrial angle he cited as a second pillar.
What to Watch
Moe framed the upside as conditional. “If the earnings come through, I think broadly when it settles down in the market finds the floor, we think the deadline will move it higher.” The near-term signal is whether Korean leveraged-ETF AUM normalizes off the $14 billion low, whether 10-day volatility resets, and whether SK Hynix and Samsung Electronics can deliver the 32% and 35% earnings growth Goldman is modeling. This is Goldman’s scenario, and readers should treat it as one house’s high-conviction call rather than investment advice.
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