Korean ETF Market Trends: Focus on Inverse and Leverage
As the domestic Korean stock market experiences a downturn, institutional and foreign investors are turning to inverse ETFs to hedge against further declines. Notably, KODEX 200 Futures Inverse 2X has become a major focus for institutional investors with 231.2 billion KRW in purchases, yielding an impressive 11.22% return over the past month. Conversely, foreign investors have shown significant interest in TIGER 200 Futures Inverse 2X, achieving a 10.80% return. This strategic move towards defensive investments has been driven by a 4.5% drop in the KOSPI over the past month and continued selling pressure mainly on semiconductor and large-cap stocks.
Additionally, retail investors are showing a contrarian approach, betting on a short-term rebound in the KOSPI 200 index by investing 229.8 billion KRW in leveraged ETFs. This decision stems from expectations that the 20-day moving average will act as a resistance level, potentially curtailing further declines. These investors have also divested from inverse ETFs they previously held, indicating a shift towards optimism about a market reversal. Such diverse investor strategies highlight the prevailing uncertainty and the need for adaptive approaches in navigating market volatility.
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