Citi shifts South Korea to tactical neutral after a 23% July decline, citing ETF unwinds and retail-driven volatility in the AI trade.
South Korea’s Kospi fell 4% in its first trading session after a holiday, extending a 23% decline in July. The drop reflects an unwind of crowded trades and retail-driven pressure, though the index remains up 55% year-to-date.
Citi downgraded South Korea to tactical neutral after a year of overweight positioning, signaling a shift in institutional sentiment. The firm remains structurally bullish on AI but trimmed Korea-specific exposure amid volatility.
The rotation includes upgrading China to overweight while maintaining Taiwan’s overweight status, indicating a broader differentiation within the AI sector rather than a wholesale exit.