Recently, U.S. investment products have dominated the top ranks of domestic exchange-traded funds (ETFs) revenue. This stands in stark contrast to domestic investment products, which have been hit hard by sluggish trends in the Korean stock market. Consequently, individual investor funds have naturally flowed into U.S. investment ETFs. The phenomenon of leaning toward the U.S. is expected to continue for the time being. To invest in domestic stocks, advice suggests selectively analyzing sector-specific rebounds and supply and demand before proceeding.
According to a recent check by Korea Securities Co., as of the 18th of this month, 6 out of the top 10 ETFs by fluctuation rate are U.S. investment products. The 'ACE U.S. Big Tech TOP 7 Plus Leverage (Synthetic)' from Korea Investment Trust Management increased by 31%, making it the largest gain. Following it were 'ACE Tesla Value Chain Active' (26.5%), Hanwha Asset Management's 'PLUS U.S. Tech TOP 10 Leverage (Synthetic)' (25.4%), and 'ACE Global AI Customized Semiconductor' (21.5%).
During the same period, Mirae Asset Global Investments' 'TIGER U.S. Philadelphia Semiconductor Leverage (Synthetic)' (19.9%) and 'TIGER U.S. Nasdaq 100 Leverage (Synthetic)' (17.9%) also ranked 6th and 8th, respectively.
The atmosphere in November was different. Among the top 10 stocks by growth rate last month, only two U.S. investment products were 'ACE Tesla Value Chain Active' and 'TIGER Global Cloud Computing INDXX'. The KOSPI and KOSDAQ indices fell by 3.9% and 8.7%, respectively, in November. However, thanks to a sectoral rotation market, several domestic stock thematic ETFs, including KB Asset Management's 'RISE AI & Robotics' (22.8%) and 'ACE KPOP Focus' (22.0%), held their positions in the top ranks of revenue. Three ETFs investing in shipping stocks (TIGER Shipping TOP 10, SOL Shipping TOP 3 Plus, HANARO Fn Shipping) also made it into the top 10.
In December, even as the KOSPI index rose by 1.2% and the KOSDAQ index by 2.9% until the previous day, there were no notable rising products among domestic sector thematic ETFs. In this situation, as the U.S. stock market, particularly big tech stocks, surged again, the revenue of domestically launched products also improved.
As stock prices rise, individual funds are also directed towards U.S. investment ETFs. This month, 238.6 billion won flowed into the 'TIGER U.S. S&P 500' ETF, making it the top net purchase. Nine out of the top 10 products by net purchase were U.S.-related ETFs. These include 'TIGER U.S. Dividend Dow Jones' (119.4 billion won), 'KODEX U.S. S&P 500 TR' (97.6 billion won), 'TIGER U.S. Nasdaq 100' (67.6 billion won), 'TIGER U.S. Philadelphia AI Semiconductor Nasdaq' (65.8 billion won), 'KODEX U.S. Nasdaq 100 TR' (60.2 billion won), and 'ACE Tesla Value Chain Active' (46.0 billion won).
Last month's top net purchase was 'KODEX KOSDAQ 150 Leverage' (455.9 billion won), and third was 'KODEX Leverage' (200.4 billion won). These ETFs track the daily growth rate of the KOSDAQ 150 and KOSPI 200 indices at double their rate. This suggests that many investors took aggressive bets, anticipating continued rises in the domestic stock market. However, this month, such movements have slowed down, with net purchases of 84.8 billion won and 23.0 billion won, respectively.
Experts believe that as weakness in the stock market continues, more investors are pulling out from the domestic stock market. In fact, the average daily transaction amount for the Korean stock market (securities and KOSDAQ) this month was 16.2887 trillion won, decreasing by over 600 billion won from November (16.8916 trillion won).
Experts noted that while the impeachment proposal vote against President Yoon Suk-yeol has concluded, there is still time left for the Constitutional Court, and the policy risks of the second Trump administration in the U.S. remain. For the time being, any investment in the domestic stock market will require selective approaches that consider sectoral growth rates and foreign investor supply and demand.
Jung Sang-hwi, a Research Institute at Heungkuk Securities, said, “The approval of the impeachment is a positive event; however, the rebound period and magnitude itself are very limited,” adding, “Given the poor market environment, the selection of defensive sectors and stocks, such as high-dividend options, is effective.”
Jo Jae-woon, a Research Institute at Daishin Securities, noted, “Foreigners net sold about 2 trillion won in the KOSPI since the declaration of martial law on the 3rd of this month but bought in the software, healthcare, machinery, utilities, and IT hardware sectors,” and added, “Considering this foreign supply and demand and the strength of rebounds, healthcare and IT hardware sectors appear advantageous.”