Foreign investors snapped up leveraged exchange-traded funds en masse on Aug. 5, signaling expectations for further gains as the Korean stock market rebounded sharply following the previous day's plunge. Individual investors, meanwhile, sold off leveraged ETFs to lock in profits.
According to data from Koscom ETF Check on Aug. 6, leveraged products dominated the top foreign net purchases the previous day. KODEX KOSDAQ150 Leverage led with 51.4 billion won in net purchases, followed by KODEX Leverage at 22.8 billion won and KODEX Semiconductor Leverage at 9 billion won. Five of the top 10 ETFs purchased by foreign investors were leveraged products. Including ETFs outside the top 10, foreign capital flowing into leveraged ETFs is estimated to have exceeded 100 billion won.
Individual investors, in contrast, offloaded leveraged ETFs. KODEX KOSDAQ150 Leverage topped individual net sales at 379.7 billion won, followed by KODEX Leverage at 201.5 billion won and KODEX Semiconductor Leverage at 69 billion won. Five leveraged products ranked among the top 10 individual net sales.
This divergence between individual and foreign investors also appeared on "Black Wednesday," Aug. 4. On that day, KODEX KOSDAQ150 Leverage and KODEX Leverage ranked among the top individual ETF purchases. Seven of the top 10 ETFs purchased by individuals were leveraged products, reflecting strong expectations for a further rally.
Foreign investors, meanwhile, purchased inverse products such as KODEX 200 Futures Inverse 2X and TIGER Inverse on the same day. Analysts note that heightened market volatility has led to opposing investment strategies between individual and foreign investors.
Market observers say this pattern illustrates differing perspectives among investors during volatile markets characterized by sharp short-term swings. "Foreign investors are buying across the broader market rather than specific stocks," said Lee Sung-hoon, a researcher at Kiwoom Securities. "Some profit-taking may emerge due to geopolitical tensions stemming from Iran."
