Funds are flooding out of KOSDAQ exchange-traded funds (ETFs) this year as returns between the KOSPI and KOSDAQ diverge sharply, with analysts pointing to a "structural vicious cycle" in which weak KOSDAQ performance triggers outflows that further weigh on the index.
According to Koscom's ETF Check on Tuesday, KOSDAQ-related products swept the top three spots for net asset declines over the past month. KODEX KOSDAQ150 led the losses, shedding 1.5738 trillion won with a return of -6.44 percent. KODEX KOSDAQ150 Leverage (795.2 billion won, -14.39 percent) and TIGER KOSDAQ150 (576.7 billion won, -6.59 percent) ranked second and third, while KoAct KOSDAQ Active (309.9 billion won, -4.23 percent) came in sixth. Extending the timeframe to three months, KODEX KOSDAQ150 (2.1327 trillion won, -7.95 percent) and KODEX KOSDAQ150 Leverage (1.2928 trillion won, -24.40 percent) ranked first and second in net asset declines, shunned by investors.
By contrast, the top seven gainers in net assets were ETFs tied to KOSPI large-cap stocks and the semiconductor and power sectors. KODEX 200 (5.035 trillion won, 27.54 percent), TIGER Semiconductor TOP10 (4.2313 trillion won, 29.58 percent), KODEX Leverage (2.8407 trillion won, 57.62 percent), KODEX Semiconductor (2.7762 trillion won, 33.96 percent), SOL AI Semiconductor TOP2 Plus (2.3353 trillion won, 47.80 percent), KODEX AI Power Core Equipment (2.316 trillion won, 40.51 percent) and TIGER 200 (2.1934 trillion won, 27.43 percent) all posted net asset gains of more than 2 trillion won, accompanied by sky-high one-month returns.
Net asset changes reflect a combination of investor cash flows and returns. Looking at fund flows alone yielded the same result. Over the past month, KODEX KOSDAQ150 topped net outflows at -1.225 trillion won, while TIGER KOSDAQ150 ranked fifth at -456.6 billion won. By contrast, the top five for net inflows were dominated by semiconductor and AI power themes, including SOL AI Semiconductor TOP2 Plus, KODEX AI Power Core Equipment, TIGER Semiconductor TOP10, RISE Samsung Electronics SK hynix Bond Mixed 50 and KODEX Semiconductor. Analysts read this as investors dumping disappointing KOSDAQ holdings and rotating into KOSPI large caps and AI themes.
Industry observers say expectations for improved liquidity are rising on the back of the recent launch of the National Growth Fund, but argue that without structural reform of the KOSDAQ market amid a rally led by semiconductor stocks, sustained passive fund inflows will be difficult to expect. "The limits of temporarily formed funds are clear," a financial investment industry official said. "Even if a 'two-tier system' is introduced for the KOSDAQ, without fundamental improvements such as securing corporate profits and raising shareholder return ratios, polarization within the KOSDAQ will only deepen."
