As volatility in Korea's stock market grows, a buying frenzy for "inverse exchange-traded funds (ETFs)," which bet on falling share prices, is resurfacing among individual investors.
According to the financial investment industry on the 11th, the ETF that individual investors bought the most on the 10th was "KODEX 200 Futures Inverse," with as much as 111.1 billion won in inflows. That is about 3.5 times the amount for the No. 2 pick the same day, "TIGER U.S. S&P 500" (32.1 billion won).
The No. 3 spot also went to an inverse product, "KODEX Inverse," with individual net purchases reaching 29.1 billion won.
Inverse ETFs are products structured to move opposite to stock indexes, generating profit when the index falls. They are considered a go-to option for investors seeking revenue when a downturn is expected.
Inverse products, which had been shunned amid the bull market of the "KOSPI 4000" era, are drawing renewed interest from individual investors as concerns about a market correction have recently grown.
In fact, until early this month, inverse ETFs had disappeared from the top ranks of individual net purchases. From Nov. 3 to 10, none of the 10 most net-bought ETFs by individuals were inverse products. During the same period, "KODEX 200" and "KODEX Leverage," which track the bull market, took the No. 1 and No. 2 spots.
Even among the top 10 ETFs by individual net selling over the past month (Oct. 10–Nov. 10), only one inverse product, "KODEX 200 Futures Inverse" (No. 6), was included.
However, on the 5th, when the KOSPI plunged more than 6% intraday and fell to the 3,800 level, sentiment flipped. As the market swung sharply, investor appetite to brace for a correction revived.
Currently, Korea's stock market is entangled with various variables, including buying by "big-hand" foreign investors, the trajectory of the artificial intelligence (AI) industry, expectations for government market support, and whether the U.S. federal government's temporary shutdown will be lifted, making short-term forecasts very difficult. Inverse ETFs are seen as drawing attention again as a response tool.
However, even though inverse ETFs appear simple in structure, the actual investment difficulty is high, so caution is needed. If a rising market persists, investment losses can accumulate quickly.
According to an analysis by NH Investment & Securities of domestic stock transaction data for its clients from January to September this year, male investors' returns were lower than those of women. One reason cited is that men were the most active net buyers of inverse ETFs.