KOSPI showed a sharp rally last week, crossing the 8,000 mark intraday for the first time on record, but investors instead bought large amounts of exchange-traded funds (ETFs) that bet on a market decline. It is seen as growing demand from investors who are leaning toward the possibility of a pullback after a steep rise.
According to the Korea Exchange (KRX) on the 17th, 327.6 billion won flowed into "KODEX 200 Futures Inverse 2X" last week (the 11th to the 15th). That was among the largest across all ETFs. This product is a representative "double inverse" ETF that tracks twice the decline of the KOSPI 200 index.
During the same period, KOSPI extended its upward momentum, surging intraday to 8,046.78 on the 15th to record "eight-thousand-pi" for the first time. However, as profit-taking poured in late in the session, it plunged more than 6%, and the index fell back to the 7,000 range.
Investors steadily increased their share of inverse ETFs even as the index rose quickly. In the first week of May (the 4th to the 8th), when KOSPI climbed more than 13% from 6,598.87 to 7,498.00, "KODEX 200 Futures Inverse 2X" saw a net inflow of 125.5 billion won. During the same period, "TIGER 200 Futures Inverse 2X" drew in 51.1 billion won, and last week the inflow expanded to 109.5 billion won.
As KOSPI advanced from breaking through 7,000 to reaching 8,000, funds in the overall ETF market also concentrated in inverse products. During this period, more than 3.4 trillion won flowed into "KODEX 200 Futures Inverse 2X," according to tallies. The top three in fund inflows were all inverse ETFs.
However, returns were sluggish due to the index's upward trend. Last week, "KODEX 200 Futures Inverse 2X" posted a return of -4.07%. That reflects the rebound return (+13.46%) from KOSPI's sharp drop on the 15th. Excluding that, returns for the 11th to the 14th were above -15%.
By contrast, leveraged ETFs outperformed in the rising market. "TIGER 200 IT Leverage," which invests in major domestic IT stocks with 2x leverage, delivered a return in the 44% range over the same period, the highest among all ETFs. Semiconductor ETFs investing in global high-bandwidth memory (HBM) companies also ranked among the top in returns.
In the securities industry, there is caution about a short-term correction as KOSPI's volatility has expanded significantly recently. However, some note that ample cash on the sidelines means the broader trend has not been broken.
According to the Korea Financial Investment Association, as of the 14th, investor deposits exceeded 13.3 trillion won. In the securities community, there is a view that, depending on the stabilization of external variables, idle funds could flow back into the stock market.