After the KOSPI index surged 76% for the year last year and an unprecedented bull market continued into the new year with a break above 5,000 points, not every investor is smiling. That is because the recent rally was led by large caps, and among sectors, only a few such as semiconductors, shipbuilding, defense, nuclear power, finance, and holding companies drove the index higher. Many laggards, including small and mid caps and stocks that failed to join the leaders, have not kept up with the index's gains and in many cases have even fallen.
According to Korea Exchange (KRX), of the 944 stocks listed on the main board, 320 fell over the past year (Jan. 21, 2025–Jan. 21, 2026), accounting for 34% of the total. Only 109 stocks beat the KOSPI index's gain of 94.83% during this period. This means a significant "optical illusion" in which a small number of stocks—only 1 out of 9 listed corporations—pulled up the entire index.
Shin Hyeon-yong of Yuanta Securities Korea said, "Another characteristic of this semiconductor-centered bull market is that the relative advantage of large caps is persisting," adding, "By contrast, the relative strength of small and mid caps and the KOSDAQ market is actually narrowing." Yeom Dong-chan of Korea Investment & Securities Co. also said, "This rise in the KOSPI index is concentrated in the top 200 corporations by market capitalization," adding, "Past cases suggest a large-cap-driven market could persist longer."
The KOSPI index has reached an uncharted 5,000 points, but a closer look at individual investment scorecards suggests there are likely many cases where the gap with the overall market mood is large, as not a few accounts are in the red.
An office worker who said this was the first year opening a stock account, a person surnamed Kim, said, "Thinking the first principle of investing is diversification, I spread my money across several sectors and small and mid caps, but my overall account return is still under 5%," adding, "I regret not going all-in on a single stock if I had known Samsung Electronics would soar like this."
Among top market-cap stocks, the ones causing the greatest sense of deprivation for investors are LG Group and POSCO Group names, and Naver (NAVER) and Kakao. While these shares are showing a gradual recovery, their returns remain in the single digits or low double digits, far short of the index's gain. In particular, the market-cap weights of Naver and Kakao, which dominated the upper ranks during the pandemic, have shrunk from 5.29% in 2021 to the 1.6% range recently, denting their image as "people's stocks."
By contrast, among large caps that have surged recently—Samsung Electronics, SK hynix, Hyundai Motor, Hanwha Aerospace, HD Hyundai Heavy Industries, SK Square, and Doosan Enerbility—their one-year share price gains range from 100% to 350%.
Meanwhile, although the KOSPI index has hit a record high, investor appetite in the KOSDAQ market remains subdued. Over the past year, while the KOSPI index roughly doubled, the KOSDAQ index rose only 30.73%. In the KOSPI market, semiconductors and so-called "shipbuilding, defense, and nuclear power" are forcefully leading the market, but the KOSDAQ is being held back by weakness in pharmaceuticals and biotech and secondary batteries, which carry significant weight.
A securities industry official said, "It may be an unprecedented market rally, but many investors still have not made money in the market," adding, "The recent strong inflow of retail funds into stocks looks like a classic 'FOMO market,' where individuals jump into equities late after prices surge."