Singapore And Brazil Emerge As Top Country ETF Performers As AI Trade Loses Momentum

Global investment flows shifted noticeably in July, with Singapore and Brazil emerging as the strongest-performing country exchange-traded funds (ETFs) while South Korea’s AI-led rally lost momentum. According to Vallum Capital Advisors’ July 2026 Multi Asset Strategy report, investors reduced exposure to semiconductor-driven markets and moved toward regions and sectors perceived to offer stronger near-term opportunities.

The report also showed that India-focused ETFs continued to underperform, reflecting weakness in the domestic equity market during the period.

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South Korea Records Sharpest Monthly Decline

According to Vallum Capital Advisors, the iShares MSCI South Korea ETF fell 19% during the past month, making it the weakest-performing country ETF in July. Despite the decline, the fund remains up 77% on a year-to-date basis and has gained 140% over the past year.

The report attributed the correction to profit booking after a prolonged rally in AI-related semiconductor stocks. It described the move as a broad unwinding of positions linked to the artificial intelligence investment theme.

Singapore And Brazil Outperform

The iShares MSCI Singapore ETF delivered the strongest monthly return among country ETFs, rising 11% in July and taking its year-to-date gain to 19%, according to the report.

Brazil also posted solid performance. The iShares MSCI Brazil Capped ETF advanced 4% during the month and has returned 14% so far this year. Over the past 12 months, the ETF has gained 36%.

Among other markets, the iShares MSCI Denmark Capped ETF rose 7% in July. ETFs tracking Ireland, New Zealand, the Pacific ex-Japan region, Poland, Switzerland and Spain also recorded monthly gains ranging between 2% and 3%.

India-Focused ETFs Continue To Lag

Bloomberg data cited in the report showed that the MSCI India ETF declined 1.5% during the month and remains down 10% year-to-date and 12% over the past year. The MSCI India Small Cap ETF rose 1.7% in July but continues to show a 0.1% decline for the year and a 10.8% fall over the last 12 months.

Speaking to Moneycontrol, Vallum Capital Advisors CEO Manish Bhandari said India’s performance reflected the underlying weakness in the domestic equity market. He added that the combination of the anti-AI trade and rupee depreciation contributed to the weaker returns for India-focused ETFs.

Investors Rotate Towards New Themes

The report highlighted a shift in investor preference toward sectors with stronger earnings visibility. Genomics led thematic ETF gains with a 21.1% monthly rise, followed by biotech at 16.2%, cybersecurity at 13.7% and insurance at 10.7%.

In contrast, South Korea’s TIGER Semiconductor TOP10 ETF declined 31.5% during the month, while the KODEX Robot Active ETF fell 26.4%. Other themes, including solar, metals and mining, coal, lithium and battery technology, steel and copper miners, also posted double-digit declines.

According to Vallum Capital Advisors, the latest performance trends indicate that global capital is becoming increasingly selective, with investors rotating across countries, sectors and investment themes instead of moving uniformly into equity markets.