The KOSPI index has broken through the 3,610 mark for the first time ever and continues a strong rally, but individual investors are actively putting money into exchange-traded funds (ETFs) that bet on a stock market "decline." As the domestic market climbs day after day, they appear to be betting on a pullback, citing mounting valuation pressure. However, with the KOSPI's strength continuing daily, individual investors are estimated to have incurred losses exceeding the 100 billion-won range.
On the 12th, according to FnGuide and the Korea Exchange, the ETF that individual investors net bought the most from Sept. 1 to the 10th of this month was "KODEX 200 Futures Inverse 2X." Individual investors net bought 552.9 billion won of this product during the period.
The KODEX 200 Futures Inverse 2X ETF tracks minus (-) two times the daily return of the KOSPI 200 futures index. The KOSPI 200 futures index rises when the judgment that the KOSPI 200 index—comprising 200 large-cap KOSPI stocks—will climb going forward is dominant. Individuals who invested in this ETF effectively made an aggressive bet on a decline in the domestic market.
Individual investors also concentrated on standard inverse ETFs. During the same period, the KODEX Inverse ETF ranked eighth among the ETFs most bought by individual investors. This product also tracks the KOSPI 200 index's daily return in reverse, generating profit when the market falls. Individual investors bought 131.5 billion won of this ETF.
However, contrary to retail investors' expectations, the KOSPI is breaking record highs day after day. The KOSPI topped 3,500 for the first time ever on the 2nd, and on this day, right after the holiday ended, it closed at 3,610.60, up 1.73% (61.39 points) from the previous trading day. The KOSPI, which stood in the 3,140 range on the first day of September, has risen by nearly 500 points in about a month.
Individual investors who bet on a decline are estimated to have suffered steep losses. Calculated based on closing prices from Sept. 1 to this day, the average purchase price (transaction amount ÷ trading volume) for individuals who invested in the KODEX 200 Futures Inverse 2X ETF is estimated at 1,147 won.
As the price of this ETF closed at 932 won on the 10th, down 4.90% (48 won) from the previous trading day, individual investors appear to have incurred losses of roughly 103.8 billion won. The average purchase price for the KODEX Inverse ETF is 3,238 won, with an expected loss of about 11.5 billion won.
Investment records linked to Naver Pay's "My Asset Service" also show positions in loss territory. Among 7,795 investors who invested in KODEX 200 Futures Inverse 2X, the average loss rate comes to 59.83%. Among 4,523 investors who invested in KODEX Inverse, the average loss rate is also around 26.67%.
Meanwhile, despite the boom in the domestic market, individual investors have crowded into domestic inverse ETFs or overseas equity and gold spot ETFs instead of domestic equity ETFs. Beyond inverse ETFs, the ETFs ranking high in individuals' net purchases included ▲ TIGER U.S. S&P 500 ▲ ACE KRX Gold Spot ▲ TIGER KRX Gold Spot ▲ KODEX U.S. S&P 500 ▲ KODEX U.S. Nasdaq 100 ▲ TIMEFOLIO U.S. Nasdaq 100 Active.
That said, with the domestic rally led by large-cap semiconductor stocks continuing, some analysis says investors should focus on domestic semiconductor-related ETFs. Researcher Han Si-hwa at Hanwha Investment & Securities said, "In the second half of this year, semiconductor momentum centered on artificial intelligence (AI) will continue, and buying by individual investors is likely to concentrate in related ETFs."