Goldman Sachs: Each 1% rise in the weightings of Samsung and SK Hynix could lead to foreign investors withdrawing around $20 billion from the South Korean market.

Goldman Sachs' Timothy Moe and John Kwon noted that a 1 percentage point rise in the combined weight of Samsung and SK Hynix in South Korea's stock index could prompt foreign investors to pull around $2 billion from the South Korean market, as the U.S. Investment Company Act requires portfolios to meet diversification thresholds. Goldman Sachs also stated that a surge in capital into leveraged ETFs, combined with rising options trading and retail margin trading, has created a structural environment where daily price volatility far outpaces what corporate fundamentals can support. South Korea's asset management growth since last year has stemmed mainly from investment gains rather than new inflows. As valuations rise, institutional investors' mechanical exposure to market volatility has also increased—a trend often linked to hedging strategies. This means even a mild market correction could trigger a cascade of forced selling.