As stock market volatility has widened recently, capital seeking stable cash flows is rapidly pouring into covered call exchange-traded funds (ETFs). With external uncertainties growing due to factors including war, demand for strategy products with downside protection characteristics has become pronounced.
Net assets of domestically listed covered call ETFs totaled 19.39 trillion won as of the previous trading day, according to Korea Exchange (KRX) data released Monday. That represents an increase of 1.26 trillion won from a month earlier, when the figure stood at 18.13 trillion won. The growth is even steeper compared with the end of last year, when assets totaled 15.04 trillion won.
The capital inflows are closely tied to recent market conditions. The KOSPI index has swung sharply over the past month. The index, which had climbed to the 6,200 level by late February this year, plunged to the 5,050 level during intraday trading late last month before rebounding to the 5,400 level, showing a directionless, choppy pattern. Analysts say the repeated cycles of gains and losses in this seesaw market have strengthened investors' preference for defensive assets.
