KOSDAQ 150 ETFs Draw Heavy Inflows Despite Market Correction

Individual investors continue to pour money into KOSDAQ-tracking exchange-traded funds despite the market entering a consolidation phase. Investors are clearly using the correction as a buying opportunity, driven by expectations for government policies to revitalize the KOSDAQ market. However, some analysts caution that it remains uncertain whether this fund flow will translate into a sustained index rebound.

According to Korea Exchange data released on February 14, the KOSDAQ index closed at 1,106.08 the previous day, down 19.91 points (1.77%) from the prior session. This represents a decline of approximately 5.01% from the 1,164.41 level recorded on January 29. Volatility has increased as profit-taking emerged following the short-term rally.

Despite the index correction, retail money continues to flow steadily into KOSDAQ 150-tracking ETFs. Over the past week (February 5-12), individual investors net purchased 51.3 billion won of KODEX KOSDAQ 150 and 99.6 billion won of KODEX KOSDAQ 150 Leverage. TIGER KOSDAQ 150 attracted 21.7 billion won, while buying continued across major products including TIGER KOSDAQ 150 Leverage (8.1 billion won) and ACE KOSDAQ 150 (2.3 billion won). This indicates investors are buying leveraged ETFs alongside standard products even during the correction.

Year-to-date cumulative fund flows show a clear concentration in KOSDAQ 150 ETFs. According to KOSCOM ETF Check, from January 2 to February 12, KODEX KOSDAQ 150 ranked first in net inflows with 4.9635 trillion won. KODEX KOSDAQ 150 Leverage ranked second with 1.9603 trillion won in inflows. TIGER KOSDAQ 150 also saw an increase of 1.6342 trillion won.

Analysts attribute the surge into KOSDAQ index ETFs to the government's market normalization policies. Financial authorities recently established new delisting requirements for "penny stocks" trading below 1,000 won and decided to gradually tighten the market capitalization threshold for delisting to 20 billion won in July 2025 and 30 billion won in January 2026. The aim is to restore market confidence by swiftly removing troubled companies. Supporting measures including encouraging pension funds to increase KOSDAQ investments and promoting research coverage are also being implemented.

Paradoxically, the low earnings visibility of individual KOSDAQ stocks is also cited as a factor driving ETF preference. Index investment strategies betting on overall market improvement driven by policy momentum are spreading, rather than stock-by-stock selection.

Jung Da-woon, a researcher at LS Securities, said, "Considering earnings expectations for KOSDAQ relative to KOSPI, the upside potential for KOSDAQ appears limited." However, she added, "Given the government policy momentum, this is a time when assigning a certain level of additional premium is warranted."