ETF Trading Volume Increased by Over 2 Trillion Won Since Early Year to 3.8173 Trillion Won
Trading Units Surged from 126.8 Million to Over 400 Million... Number of Items Decreased
Especially High-Risk 'Inverse' Increased Sharply from 300.2 Billion to 1.4807 Trillion Won
[Asia Economy reporters Song Hwajeong and Lee Minwoo] Since the outbreak of the novel coronavirus infection (COVID-19), individual investors' stock investments have surged significantly, leading to a sharp increase in the trading value of Exchange-Traded Funds (ETFs) in the first half of the year. In particular, the trading value of inverse ETFs skyrocketed as individual investors flocked to 'Gopbeoseu (Gop + Inverse)' ETFs, which aim for twice the return of the decline rate.
According to the Korea Exchange on the 29th, the total ETF trading value increased by more than 2 trillion won, from 1.8006 trillion won at the beginning of the year to 3.8173 trillion won as of the 26th. Despite the number of ETF listings decreasing slightly from 450 to 444 during the same period, both trading volume and trading value saw significant growth. Trading volume rose from 126.8 million units at the start of the year to 432.64 million units.
Leverage and inverse ETFs showed even steeper growth. The trading value of leverage ETFs increased from 439.1 billion won at the beginning of the year to 1.3057 trillion won, while inverse ETFs surged from 300.2 billion won to 1.4807 trillion won.
This sharp increase in trading value is attributed to the 'Donghak Ant Movement' after the COVID-19 outbreak, which saw a massive influx of individual investors into the stock market. From the beginning of this year to the 26th, the average daily trading value of KOSPI and KOSDAQ was approximately 18.3 trillion won, nearly doubling the previous year's average of 9.3 trillion won. During this period, individual investors recorded a net purchase of 39.0577 trillion won, marking the largest scale ever.
While individual investors mainly net purchased large-cap blue-chip stocks centered on Samsung Electronics, they also heavily bought inverse ETFs. During the same period, individual investors purchased Samsung Electronics the most, with 8.4377 trillion won, followed by KODEX 200 Futures Inverse 2X with 2.3849 trillion won. KODEX 200 Futures Inverse 2X is an ETF based on the KOSPI 200 futures index that seeks twice the daily inverse return, commonly known as 'Gopbeoseu.' Individual investors net purchased 492 billion won worth of this product in this month alone, about three times the previous month's (166.9 billion won) amount.
Earlier, in January when the stock market was steadily rising, individual investors only net purchased 20.3 billion won of KODEX 200 Futures Inverse 2X. However, in February, as the stock market declined in the early stages of the COVID-19 impact, they recorded a net sale of 211.4 billion won, driven by expectations of a rebound. But in March, as COVID-19 fears spread worldwide and inter-country travel restrictions and economic downturns became apparent, net purchases increased to 792.2 billion won. This suggests a judgment that the economic downturn will be prolonged as no COVID-19 treatment has yet been found. In April, under the same trend, net purchases peaked at 1.1248 trillion won.
Jeon Gyun, a researcher at Samsung Securities, commented, "It is ironic that despite the stock market rebound after March, the asset size of inverse ETFs also increased simultaneously," adding, "It appears that investors are buying inverse ETF assets due to concerns about future economic recovery and uncertainties in the financial market, such as the reemergence of trade conflicts between the U.S. and China."
Looking at the ETF returns in the first half of the year, pharmaceutical and bio stocks stood out amid COVID-19, and related ETFs also recorded high returns. KODEX Healthcare rose 47.46% this year, achieving the highest return, followed by TIGER Healthcare (47.31%), ARIRANG KRX300 Healthcare (45.11%), TIGER KOSDAQ150 Biotech (43.41%), KBSTAR Healthcare (41.60%), TIGER Medical Devices (41.45%), and TIGER 200 Healthcare (39.40%). Seven of the top 10 ETFs by return in the first half were bio-related. Additionally, TIGER Crude Oil Futures Inverse (H) (44.46%), TIGER Software (41.42%), and KODEX WTI Crude Oil Futures Inverse (H) (40.98%) were also included in the top 10.
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