Audacious retail investors... bet 2 trillion won on leveraged ETFs

As the KOSPI plunged 21% in seven trading days, retail investors bought more than 2 trillion won worth of leveraged exchange-traded funds (ETFs). Even as the market fell to the 5,500 level, they put money into leveraged products, aggressively betting on a rebound.
According to financial industry sources on the 20th, seven of the 15 ETFs with the largest net purchases by retail investors from the 6th to the 15th were leveraged products. Their combined net purchases totaled 2.1429 trillion won. During that period, the KOSPI fell for seven consecutive trading days, losing 1,449.52 points (21%) and sliding to 5,554.22.
The product retail investors bought the most was KODEX Leverage, with net purchases of 1.1359 trillion won. It tracks twice the daily return of the KOSPI 200 and ranked first in net purchases of ETFs by retail investors. Another 407.8 billion won flowed into KODEX KOSDAQ 150 Leverage ETF, which tracks twice the daily return of the KOSDAQ 150. Net purchases of the two products alone reached 1.5437 trillion won.
Purchases targeting a rebound in semiconductor stocks also stood out. A total of 179.4 billion won flowed into Samsung KODEX Semiconductor Leverage ETF and 90.7 billion won into Mirae Asset TIGER Semiconductor TOP10 Leverage ETF. Even as semiconductor stocks came under pressure amid concerns about investment in artificial intelligence (AI), investors used leverage to bet on a recovery in share prices.
Alongside bets on a broad recovery in the index, investors also bought single-stock products seeking higher returns from a rebound in large-cap semiconductor stocks. A total of 238.1 billion won flowed into two SK Hynix leveraged products: 167.8 billion won into KODEX SK Hynix Single-Stock Leverage ETF and 70.3 billion won into MIRAE ASSET TIGER SK Hynix Single Stock Leverage. Another 91.1 billion won flowed into KODEX Samsung Electronics Single-Stock Leverage.
With retail investors betting heavily on a rebound in the index and semiconductor stocks, analysts cite sustained earnings expectations as a basis for a recovery. However, concerns about the funding and profitability of companies investing in AI could still lead to actual cuts in investment, they warn. They say share prices can continue to rise only if confidence returns that semiconductor companies will actually deliver the earnings they have forecast.
[email protected] Bae Hangeul Reporter