“If you don’t know stocks, they tell you to buy this?” ... Individual investors pour 80 trillion won into ETFs

[Financial News] As the domestic stock market continues to weaken, individual investors’ net purchases of exchange-traded funds (ETFs) surpassed 80 trillion won for the first time this year. Although the pace of buying has slowed in the second half of the year, investment through pension accounts and demand for exposure to the U.S. stock market are helping support buying.
According to the Korea Exchange and other sources on the 25th, individual investors’ net ETF purchases totaled 80.0191 trillion won from the start of this year through the 23rd. That is more than double the 35.2125 trillion won in net purchases for all of last year. At an average of about 8 trillion won in net purchases per month, the annual total is expected to approach 100 trillion won if the current trend continues.
Individual investors recorded monthly net purchases for 33 consecutive months, from January 2024 through September this year. However, net purchases, which amounted to about 61 trillion won in the first half, fell to around 19 trillion won over roughly four months in the second half.
The KOSPI fell to the 5,500 range after topping 9,000 based on closing prices in June, and total ETF net assets declined from at least 500 trillion won to around 420 trillion won. Even so, net buying continued to exceed selling.
Foreign investors also made net purchases of ETFs worth 10.6808 trillion won this year, about 9 trillion won more than the 1.6622 trillion won they bought net last year. After purchasing 6.9968 trillion won in the first half, they added another 3.684 trillion won in the second half.
The ETF with the highest net purchases by individual investors was TIGER US S&P 500, which saw inflows of 5.2003 trillion won. It was followed by KOSDAQ 150 Leverage at 3.515 trillion won, KODEX 200 at 3.4426 trillion won, and KODEX Nasdaq-100 at 3.3947 trillion won.
Foreign investors made net purchases worth 1.6284 trillion won in Mirae Asset TIGER MSCI Korea Total Return ETF, which invests across major domestic companies such as Samsung Electronics Co., Ltd. and SK hynix. They also bought 1.1583 trillion won worth of TIGER US Nasdaq-100. Net purchases of KODEX Leverage and KODEX 200 totaled 962.7 billion won and 770.1 billion won, respectively.
The increase in individual investors’ ETF purchases is believed to have been driven by factors including inflows into pension accounts and a rise in the number of new investors amid a stock market boom at the start of the year. The buying is being supported both by a growing share of pension-account investments going into risk assets and by ETFs’ increasing share among those assets.
The ability to invest in U.S. stocks through ETFs listed in Korea is also drawing demand. While the KOSPI fell sharply from its peak, the U.S. S&P 500 index rose from the 7,500 range to the 7,600 range over the same period, showing a relatively resilient trend.
[email protected] Lee Jeong-hwa Reporter