Retail Investors Buy Leveraged ETFs, Sell Inverse Products Amid KOSPI Plunge

On "Black Tuesday," when the domestic stock market plunged due to war between the United States and Iran, retail investors heavily purchased exchange-traded funds (ETFs) that bet on index gains, data showed.

According to the financial investment industry on the 3rd, the most heavily net-purchased ETF by retail investors was Samsung Asset Management's "KODEX Leverage," which bets 2x on KOSPI gains, with net purchases of 462.4 billion won. "KODEX KOSDAQ150 Leverage," which tracks the KOSDAQ index at 2x, ranked second with 232.5 billion won, while "KODEX 200," which profits when KOSPI rises, came in third with 182.8 billion won. Mirae Asset Global Investments' "TIGER Semiconductor TOP10 Leverage" (134.6 billion won) and "TIGER Semiconductor TOP10" (129.4 billion won), which have heavy weightings in Samsung Electronics and SK Hynix, ranked fourth and fifth in net purchases.

In contrast, selling pressure was pronounced for ETFs that track index declines. Retail investors sold the most shares of "KODEX 200 Futures Inverse 2X," with net sales of 136.5 billion won. This product inversely tracks the daily return of the KOSPI 200 futures index at 2x. "KODEX Inverse," which profits when the index falls, also saw substantial net sales of 56.6 billion won.

The KOSPI closed at 5,791.91, down 452.22 points (7.24%) from the previous trading day. The decline was the largest in approximately one and a half years since the yen carry trade unwinding shock on August 5, 2024 (-8.77%). Analysts suggest retail investors viewed the correction as a buying opportunity, investing in products that follow upward index trends while liquidating some inverse products that had led to losses during the prolonged bull market.

In the KOSPI market, foreign investors drove down the index with net sales of 5.17 trillion won, while institutions also showed a selling bias with 889.5 billion won in net sales. Retail investors, however, supported the market floor with net purchases of 5.80 trillion won. KOSPI had reached the historic "6,000" milestone for the first time on the 25th of last month but surrendered the 6,000 level after just three trading days. The KOSDAQ index also closed at 1,137.70, down 55.08 points (4.62%).