Rising Popularity of Defensive ETFs Amid Market Volatility
Amidst the recent volatility in domestic and international equity markets, investors are increasingly focusing on defensive Exchange Traded Funds (ETFs). Notably, 'buffer-type ETFs' have garnered attention for their ability to cushion potential losses while presenting opportunities for returns during downtrends. An example is the 'KODEX US S&P 500 Buffer March Active ETF', which recorded a 4.12% increase over the last month, showcasing its effectiveness. These buffer ETFs operate by setting predefined limits on both losses and gains, providing more stable investment options.
As market instability persists, portfolio risk management has become a priority, with movements towards other types of defensive ETFs such as covered call and money market ETFs. This transition underscores investors' strategies to secure returns while minimizing risks. The growing interest in these defensive ETFs is not only prominent in Korea but is also being observed in broader international markets, signifying a global trend towards safeguarding investments.
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