As the KOSDAQ index has continued its rally this year and crossed the 1,000 mark, money is pouring into exchange-traded funds (ETFs) that track the index. In this situation, the ETF premium/discount rate, interpreted as a signal of market overheating, has also recently turned positive.
According to the financial investment industry on the 4th, the premium/discount rate of "KODEX KOSDAQ150," which uses the large-cap-focused KOSDAQ150 index as its underlying asset, was 0.10% as of the 30th of last month. After staying negative since the 5th of last month, the rate turned positive on the 23rd of the same month and has maintained an upward trend except on the 2nd of this month, when the KOSDAQ index plunged 4.44%.
"TIGER KOSDAQ150" showed a similar move. For this ETF, the premium/discount rate, which had been negative since the 5th of last month, turned positive on the 23rd and expanded to as much as 0.47% on the 26th.
An ETF's premium/discount rate is an indicator that expresses as a percentage the gap between the price in the market transaction and the net asset value (NAV). A positive rate means the ETF price is trading above the value of its actual constituent assets and typically appears when investment demand surges.
The fact that the premium/discount rate for KOSDAQ150 ETFs has turned from negative to positive suggests that investors are buying even at relatively higher prices.
In fact, KOSDAQ ETFs drew money as the market overheated. "KODEX KOSDAQ150 Leverage" attracted 1.4077 trillion won, ranking second among top net inflows, while "TIGER KOSDAQ150" and "TIGER KOSDAQ150 Leverage" saw inflows of 667.2 billion won and 138.6 billion won, respectively.
Im Eun-hye, a Samsung Securities researcher, said, "It is very unusual for the premium/discount rate of KOSDAQ150 ETFs to be positive," adding, "This reflects that strong buying demand is flowing into those ETFs."