As the KOSPI keeps undergoing corrections, individual investors' net buying streak of exchange-traded funds (ETFs) has reached the 32nd straight month. But as market weakness drags on, last month's net purchases fell to the lowest level this year.
On the 6th, the financial investment industry said individual investors posted a net purchase of 2.3756 trillion won in domestic ETFs in August. After a net sale of 72.5 billion won in Dec. 2023, they have logged net purchases for 32 consecutive months. Cumulative net purchases over the period came to 128.0397 trillion won.
Individuals' ETF buying has continued this year as well. Cumulative net purchases from January to August totaled 73.072 trillion won, and through Sept. 4 they also net bought 357.7 billion won.
However, the buying intensity has clearly weakened. August's net purchases were the lowest this year and the smallest since August last year. Compared with 8.7867 trillion won in July, it was about a quarter, and it was far short of a tenth of the record 24.672 trillion won in June.
It is seen as the result of the KOSPI continuing a sluggish trend. After plunging in mid-June, the KOSPI has failed to find clear direction, repeating rebounds and corrections.
Even as the overall ETF market size shrank, individuals kept net buying. Total ETF net worth fell about 100 trillion won from 533.2361 trillion won on June 22 to 437.6713 trillion won on the 3rd. During the same period, individuals recorded net purchases of 17.9156 trillion won in ETFs.
In particular, individuals' funds are flowing more into overseas equity ETFs than domestic equity ETFs. According to FnGuide, domestic equity ETF net worth fell 23% from 248.4414 trillion won at the end of June to 190.3574 trillion won on the 3rd. Overseas equity ETFs slipped just 9% in the same period, from 144.0638 trillion won to 130.4952 trillion won.
While Korea's stock market underwent a correction, the three major U.S. New York indexes have been rising since July, which is seen to have increased the relative preference for overseas equity ETFs.
The industry sees a high chance that, even if individuals' ETF buying slows in the short term, the long-term net buying trend will continue. In particular, regular inflows through retirement pension accounts have taken root as a main source of demand in the ETF market.