₩117.8 billion poured in over two days...Retail investors flock to ‘double inverse’ ETFs as KOSPI rebounds

[Financial News] As the KOSPI Composite Index attempts to reenter the 7,000 range, individual investors have been found to have bought large amounts of inverse exchange-traded funds (ETFs), which generate returns when the index falls.
According to the Korea Exchange (KRX) and Koscom CHECK on the 8th, the ETF that individual investors bought most heavily on a net basis in the stock market over the two days through the previous day was ‘KODEX 200 Futures Inverse 2X.’ Net purchases totaled ₩117.8 billion.
The product is a so-called ‘double inverse’ ETF designed to track twice the inverse of the daily return of the KOSPI 200 Index.
The second-most purchased ETF among individuals was also linked to declines in the index. Net purchases of ‘KODEX Inverse ETF,’ which is designed to generate returns equivalent to the daily decline of the KOSPI 200 Index, totaled ₩114.6 billion.
Both products are structured to generate higher returns as the KOSPI Composite Index falls. In effect, individual investors allocated funds in anticipation of a possible decline in the index.
Individual buying was also concentrated in double-inverse products among single-stock ETFs.
‘Shinhan SOL F-SK Hynix Single Stock Inverse 2X,’ which tracks twice the inverse of SK hynix’s daily return, ranked fourth in net ETF purchases by individuals.
The KOSPI Composite Index surged 4.61% the previous day on strength in semiconductor stocks. It climbed as high as 7,171.52 during the session, reentering the 7,000 range, before turning lower late in the session and closing at 6,954.52, down 0.58%.
In the KOSPI market, individual investors engaged in large-scale selling to realize profits. Their net sales totaled ₩3.0603 trillion for the day.
Foreign investors and institutions absorbed the selling, recording net purchases of ₩452.8 billion and ₩848.8 billion, respectively.

Meanwhile, analysts in the securities industry have also suggested that strength in major semiconductor stocks could continue for the time being.
In a report released the previous day, KB Securities raised the possibility of a memory-chip supply shortage. KB Securities assessed, “The memory market next year is expected to face the tightest supply environment in history,” adding, “As of the third quarter, Samsung Electronics and SK hynix have reduced their memory inventories to less than 10 days. Beyond a simple recovery in demand, there is a high likelihood that the absolute volume of supply available will itself become insufficient.”


[email protected] Han Seung-gon Reporter