As the KOSPI index broke through 5,000 points and the KOSDAQ index topped 1,000 points, signaling a boom in Korea's stock market, people in their 50s emerged as the generation that most aggressively bet on leveraged products that track twice the index's gains. Contrary to the common view that middle-aged and older investors are conservative, investors in their 50s led the domestic leverage market by pursuing aggressive strategies.
An analysis by a major domestic securities firm of leveraged exchange-traded fund (ETF) holdings as of the end of January this year found that people in their 50s held 104.2 billion won (34%) of "KODEX KOSPI Leverage," the largest share among all age groups.
Second was age 60 and older (94.9 billion won), followed by people in their 40s (74.6 billion won), 30s (25.6 billion won), and 20s (7.7 billion won). The ETF is the No. 1 product by net worth among domestic leveraged ETFs.
The number of accounts in their 50s holding the leveraged ETF was also the highest at 3,121, outpacing those in their 40s (3,015), 60 and older (2,062), 30s (1,444), and 20s (381). The sheer number of investors was large enough that it cannot be explained simply by differences in asset size between generations.
The year-over-year increase was also the largest among those in their 50s. As total balances rose from 197.4 billion won to 307.9 billion won, the increase among people in their 50s was tallied at 36.3 billion won. They were followed by those 60 and older at 32.2 billion won, 40s at 27.2 billion won, 30s at 9.9 billion won, and 20s at 4.2 billion won.
In particular, people in their 50s invested more aggressively in the more volatile KOSDAQ market. Holdings of "KODEX KOSDAQ150 Leverage," the No. 2 domestic leveraged ETF by net worth, totaled 127.8 billion won (29%), overtaking last year's leader, those in their 40s (26%), for the highest share.
Elsewhere, those 60 and older held 121.3 billion won (27%), people in their 30s 65.4 billion won (15%), and those in their 20s 13 billion won (3%). The number of accounts was also highest among people in their 50s (6,658), followed by those in their 40s (6,292), 30s (4,471), 60 and older (4,312), and 20s (1,270).
In a year, the ETF's total balance surged from 175.1 billion won to 441.3 billion won, an increase of 266.2 billion won. Of that, the increase among those in their 50s was 80 billion won, accounting for about 30% of the total gain.
Generally, the middle-aged have been widely perceived to make stable investments based on accumulated assets, while younger people make aggressive investments with small amounts. But the data show that investors in their 50s and older, nearing retirement, are exhibiting behaviors aimed at maximizing returns over the short term.
By contrast, most young investors put money into overseas assets, resulting in relatively weaker demand for domestic leveraged ETFs. According to a report titled "Analysis of individual investor characteristics and performance" released by the Korea Capital Market Institute (KCMI) on the 9th, those in their 20s allocated 60% to overseas exchange-traded products (ETPs). They were followed by those in their 30s at 46%, 40s at 24%, 50s at 17%, and 60s at 13%.
The report interpreted this as a greater tendency to use overseas leveraged products when held assets are smaller.
Kang So-hyun and Kim Min-gi, research fellows at KCMI, said, "In the domestic market, middle-aged and older investors, who tend to have relatively more investment experience, are active in strategies that bet on short-term direction."