No.1 ETF Fund Inflow 'KODEX Comprehensive Bond (AA- or higher) Active'
No.2 'KODEX Inverse'... Preference for Safe Assets
[Asia Economy Reporter Hwang Yoon-joo] Domestic exchange-traded fund (ETF) investors are betting on a decline in Korean stock prices. At the same time, there appears to be a strengthening shift of funds toward safe assets.
According to the Korea Exchange on the 8th, the top ETF in terms of fund inflow since December until the previous day was ‘KODEX Comprehensive Bond (AA or higher) Active,’ which attracted 160 billion KRW. This was followed by ‘KODEX Inverse’ (60.3 billion KRW) and ‘TIGER US Nasdaq 100’ (58.1 billion KRW).
Looking at the top three ETFs attracting funds, it can be interpreted that investors are investing in safe assets domestically and risky assets overseas. Funds flowed into the ‘Inverse’ product, which expects domestic stocks to decline, and overwhelmingly into bonds, which are safe assets. On the other hand, the US Nasdaq index was expected to rise.
Next were 4th place ‘KODEX MSCI KOREA TR’ (50.9 billion KRW), 5th ‘KODEX Leverage’ (48.6 billion KRW), and 6th ‘KODEX 200 Futures Inverse 2X’ (46.0 billion KRW).
‘KODEX MSCI KOREA TR’ is a total return (TR) product that automatically reinvests dividends, and it is interpreted that investment demand surged during the year-end dividend season. In particular, TR ETFs are not subject to dividend income tax, so they have a significant tax-saving effect, and since there is no dividend drop, they have the advantage of better defending returns than general ETFs in a sideways market.
Regarding the KOSPI 200 index, it is notable that funds flowed into both leverage and inverse leverage ETFs simultaneously. These products can generate returns that are multiples of the price fluctuations. KODEX Bank, KBSTAR KIS Short-Term Comprehensive Bond (AA or higher) Active, KBSTAR 23-11 Corporate Bond (AA or higher) Active, and KODEX KOFR Interest Rate Active (Synthetic) also ranked in the top. These are bank stocks and bonds, indicating that investors have a strong tendency to invest in safe assets.
An asset management company official explained, "As the Federal Reserve (Fed) mentioned adjusting the pace of interest rate hikes, although the peak of interest rates has not yet been reached, demand for long-term bonds is increasing with the expectation that rates will soon decline. While stock market volatility remains high and investors are taking a conservative approach, long-term bond prices have fallen 40-50% since the beginning of the year, so demand for bonds aiming for yield increases is reflected in the ETF market."
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