With the KOSDAQ index topping 1,000 points last month, ushering in the "Cheonsdaq" era, net purchases by institutions surpassed 10 trillion won for the first time. Brokerages said much of the institutional buying stemmed from individual investors' purchases of KOSDAQ exchange-traded funds (ETFs).
According to the Korea Exchange (KRX) on the 1st, institutions posted net purchases of 10.1 trillion won on the KOSDAQ market last month. That was the largest monthly institutional net purchase on record for KOSDAQ. The previous record was 1.4537 trillion won in Dec. 2021.
By day, institutions recorded six straight sessions of net buying from the 23rd to the 30th last month. By type, financial investment was the largest at 10.915 trillion won, while pensions and others bought 143 billion won.
Brokerages noted that as individuals' net purchases of KOSDAQ ETFs increased, net purchases classified as "financial investment" also rose. Typically, when an individual investor buys an ETF, securities firms, which act as liquidity providers (LPs), purchase the underlying index constituents in the market during the creation and redemption process, and those volumes are counted as financial investment purchases.
Na Jeong-hwan, an analyst at NH Investment & Securities, said, "The players leading the current stock price gains are not foreigners but institutional investors, and a significant portion of those funds comes from individual investors' ETF investments."
The explanation is that financial investment's net purchases reflect not only institutions' voluntary active buying but also the structural characteristic in which creation funds stemming from individuals' ETF net purchases are counted as financial investment purchases in the cash market.
Na said, "The continued trend of net buying by financial investment suggests that individual funds are flowing indirectly into the market through ETFs."
On the 26th last month, when the KOSDAQ index hit 1,000 points for the first time in four years, individuals made net purchases of 595.2 billion won of Samsung Asset Management's "KODEX KOSDAQ150 Exchange-Traded Fund (ETF)," which tracks the KOSDAQ index's return. That was the largest one-day net purchase on record.
With individuals clearly investing in the KOSDAQ market via ETFs, government policy also appears likely to stoke expectations. Recently, the Public Growth Fund, set to be unveiled as early as June, has emerged as a candidate to use the KOSDAQ index as a key benchmark (BM).
However, individual investors showed a trend of heavy selling in single KOSDAQ stocks. According to the Korea Exchange (KRX), individuals' net selling on the KOSDAQ market last month totaled 9.267 trillion won. In particular, they took profits, centered on secondary battery stocks. The stock individuals net sold the most on the KOSDAQ market last month was EcoPro, unloading 1.135 trillion won. EcoPro BM was second, with 765 billion won sold.
Meanwhile, stock ownership "churn" is the most active in two years. The turnover of listed shares on the KOSDAQ market last month was 46.96%, the highest since January 2024 (50.71%).