Margin loan balances for exchange-traded funds (ETFs) are surging as the KOSPI extends its rally, with retail investors increasingly borrowing money to invest in funds rather than individual stocks. Analysts attribute the trend to investors seeking lower-cost entry points through ETFs, given that large-cap shares have already climbed sharply.
According to Koscom's ETF CHECK on Tuesday, margin loan balances for Samsung Electronics (005930.KS) and SK hynix (000660.KS) stood at 4.26 trillion won and 3.53 trillion won, respectively, as of December 1—the highest among all listed stocks. Margin loan balances refer to outstanding amounts that investors have borrowed from brokerages to buy stocks but have not yet repaid. The figure typically rises as more investors anticipate further share price gains.
As Samsung Electronics and SK hynix continued to lead the rally, margin buying also spread to ETFs holding the two stocks. Samsung Asset Management's KODEX AI Semiconductor TOP2 Plus invests in artificial intelligence (AI) and semiconductor core stocks, including Samsung Electronics and SK hynix. The ETF's margin loan balance increased by 14.5 billion won over the past month, from November 4 to December 1.
KODEX AI Semiconductor TOP2 Plus holds Samsung Electronics and SK hynix at 24.76% and 24.40%, respectively. Following a recent surge in Samsung Electro-Mechanics shares, that company's weighting has risen to 34.53%. As of December 1, the ETF's margin loan balance reached 20.6 billion won, with 70.6% of the total accumulated over the past month. On November 28 alone, new margin loan inflows reached 8.1 billion won, more than double the 3.7 billion won in repayments.
Other semiconductor and index-tracking ETFs are also seeing rapid increases in margin buying. Over the same period, the margin loan balance for HANARO Fn K-Semiconductor rose by 7.5 billion won to 12.8 billion won, while TIGER 200IT increased by 6.3 billion won to 8.8 billion won.
Margin loans on KODEX 200, which tracks the KOSPI 200 index, climbed by 7.3 billion won to 38.2 billion won. Other ETFs in the top 50 by net inflows of margin loans included KoAct Bio Healthcare Active (margin balance of 12.7 billion won, net increase of 5.6 billion won) and HANARO Power Equipment Investment (6.9 billion won, 5.3 billion won). As interest in the stock market grows, individual investors are increasingly borrowing money to invest not only in individual stocks but also in ETFs.
"Concerns about overheated margin buying are being raised amid the rally in Samsung Electronics and SK hynix," said Han Ji-young, an analyst at Kiwoom Securities. "The absolute increase in margin loan balances does present an environment that could fuel anxiety about investment overheating on the surface."
