Canadian Emerging-Market ETFs Rise on Korea's Chip Boom
Canadian investors rode SK Hynix's record-breaking run through emerging-market ETFs.
South Korea sat at the centre of the emerging-market story in the week of 15 to 19 June. Chipmaker SK Hynix surged 5.6% on Monday 22 June to overtake Samsung Electronics as the country's most valuable listed company, capping a Korean rally that has carried the KOSPI up more than 110% in 2026. Because Korea carries a heavy weight in emerging-market indices, that move read through to Canadian EM funds, all of which hold more than 15% in South Korean equities. The nine funds covered here returned between 4.92% and 7.75% on the week, though their flows told a more cautious story, as set out below.
A Korean Memory Rally and an AI Semiconductor Bid
The first driver reached Canada by way of index construction. With Samsung and SK Hynix together more than 50% of the KOSPI, and Korea a top-tier constituent of MSCI emerging-market benchmarks, the Korean chip rally flowed directly into the broad EM trackers that dominate this list. SK Hynix has roughly 350% behind it this year against Samsung's 195%, lifted by AI-driven demand for memory chips, including high-bandwidth memory.
The second driver was the semiconductor and AI theme in its own right. As AI build-out has rerated chipmakers worldwide, the funds carrying direct semiconductor and AI mandates outpaced the broad emerging-market trackers over the week, a pattern visible in the fund-level detail below.
The contrary signal sat in the flows. Even as prices climbed, the broad emerging-market segment saw net redemptions over the week, a sign of profit-taking at the headline level rather than fresh conviction, against continued inflows for several individual funds.
The Rally in Context
The transmission mechanism is worth stating plainly. These Canadian funds caught the Korean wave precisely because MSCI still classifies South Korea as an emerging market, keeping it inside the EM indices they replicate. That classification is itself under review, with MSCI again declining to upgrade Korea to developed-market status, citing unresolved criteria including the absence of a fully deliverable offshore currency market, and decisions due this week. An eventual upgrade would, over time, pull Korea out of EM benchmarks and reshape the exposures behind these very funds, a structural consideration sitting beneath this year's run.
For now the breadth is real, with every fund in the cohort posting a double-digit yearly return and the semiconductor-focused vehicle far ahead of the broad trackers.
Emerging Markets ETF Performance
Group-level figures are set out in the accompanying table. Fund by fund, the picture was as follows.
The largest fund anchored the group steadily. The iShares ESG Aware MSCI Emerging Markets Index ETF (XSEM) returned 5.82% on the week and 32.14% for the year at C$6.42bn, with a modest C$6.1m weekly inflow.
The core IMI tracker drew the strongest yearly flows. The iShares Core MSCI Emerging Markets IMI Index ETF (XEC) returned 5.61% on the week and 31.42% for the year at C$4.78bn, adding C$7.0m on the week and C$619.1m across 2026, the heaviest annual intake in the group.
BMO's fund was the cohort's flow outlier. The BMO MSCI Emerging Markets Index ETF (ZEM) returned 4.92% on the week and 32.08% for the year at C$3.56bn, yet shed C$116.8m over the week, the single largest redemption on the list and, on its own, larger than the broad emerging-market group's entire net weekly outflow, even as it continued to show C$687.5m of inflows for the year.
The AI fund rose but kept losing assets. The CI Global Artificial Intelligence ETF (CIAI) returned 5.95% on the week and 31.42% for the year at C$1.21bn, with a C$14.4m weekly inflow that ran against a net year-to-date outflow of C$86.5m, the only fund here with negative flows over 2026 despite a strong return.
The index trackers from Desjardins and Manulife were quiet on flows. The Desjardins Emerging Markets Equity Index ETF (DMEE) returned 5.72% on the week and 31.17% for the year at C$965m, while the Manulife Multifactor Emerging Markets Index ETF (MEME.B) returned 5.15% and 30.61% at C$735m. Both saw only token weekly flows.
The iShares MSCI tracker led the broad EM pack on return. The iShares MSCI Emerging Markets Index ETF (XEM) returned 6.17% on the week and 34.16% for the year at C$474m, the strongest of the broad EM vehicles, though it gave back C$5.5m on the week.
The semiconductor specialist dominated the week. The Global X Artificial Intelligence Semiconductor Index ETF (CHPS) returned 7.75% on the week and 73.32% for the year at C$418m, the standout on both counts, capturing the chip rally most directly and drawing a C$6.8m weekly inflow.
Scotia's tracker rounded out the group. The Scotia Emerging Markets Equity Index Tracker ETF (SITE) returned 5.73% on the week and 31.75% for the year at C$260m, with a small C$1.0m weekly outflow.
Group Data
Fund Data
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
