Retail Investors Betting on the Bottom Suffer Double-Digit Losses
Leveraged exchange-traded funds (ETFs), on which retail investors net-bought more than 1 trillion won over the past month, have posted double-digit declines. According to the Korea Exchange on the 5th, individuals net-purchased 1.0513 trillion won of KODEX Leverage, which tracks twice the daily returns of the KOSPI 200 index, between the 6th of last month and the 4th of this month — the largest individual net buying among domestically listed ETFs. KODEX KOSDAQ150 Leverage (807.9 billion won), KODEX Semiconductor Leverage (203.3 billion won) and TIGER Semiconductor TOP10 Leverage (191.9 billion won) also ranked among the top individual net purchases. The move is interpreted as investors, seeing the market tumble on a recent plunge in semiconductor stocks, judging it the right time to buy at bargain prices and scooping up index-type leveraged ETFs.
However, over the same period, KODEX Leverage fell 38.37 percent and KODEX KOSDAQ150 Leverage dropped 41.75 percent. Meanwhile, inverse ETFs — which deliver bigger gains as the index falls — swept the top of the return rankings. KIWOOM 200 Futures Inverse 2X posted a 46.38 percent return, TIGER 200 Futures Inverse 2X 45.33 percent and KODEX 200 Futures Inverse 2X 44.93 percent. Single-stock inverse products also gained, with SOL SK Hynix Futures Single-Stock Inverse 2X up 43.59 percent and PLUS Samsung Electronics Futures Single-Stock Inverse 2X up 42.75 percent.
On this day, the KOSPI closed at 5,383.80, down 300.00 points (5.28 percent) from the previous session, while the KOSDAQ finished at 678.41, down 36.54 points (5.11 percent). KODEX Leverage and KODEX KOSDAQ150 Leverage fell 11.35 percent and 12.07 percent, respectively, the same day.
On that day, online stock market discussion boards were flooded with posts expressing concern over the KOSPI slipping below the 5,000 level and lamenting missed opportunities to cut losses. Some posts also raised worries about the heavy weighting of semiconductor stocks.
