Foreigners and Institutions Bet on KOSPI Rally... Individuals Focus on 'KOSDAQ'

As the KOSPI has recovered to the 4,100 level and the KOSDAQ has risen above 930 this month, the stock market appears to be gradually moving out of its correction phase. In this environment, foreign investors and institutional investors are betting on a rise in the KOSPI, while individual investors are focusing on a rise in the KOSDAQ.

According to the Korea Exchange on December 10, foreign and institutional investors have been buying KOSPI leveraged exchange-traded funds (ETFs) this month, betting on further gains in the KOSPI. Foreign investors made a net purchase of 15.92 billion KRW in KODEX Leverage, making it their second most purchased ETF. TIGER Leverage (7.92 billion KRW) also ranked high among their net purchases. Leveraged ETFs offer double the returns when the underlying index rises.

Institutions also made a net purchase of 349.4 billion KRW in KODEX Leverage, making it their second most purchased ETF as well. In addition, KODEX 200 (138.89 billion KRW) and TIGER 200 (2.16 billion KRW) were among the top net purchases, reinforcing the outlook for further gains in the KOSPI.

In contrast, individual investors have been betting on a rise in the KOSDAQ rather than the KOSPI. Individuals made a net purchase of 185.62 billion KRW in KODEX 200 Futures Inverse 2X, their second most purchased ETF. This ETF, known as "Gopverse" (a combination of "multiple" and "inverse"), is designed to deliver double the inverse performance of the KOSPI 200 futures index, allowing investors to profit twice as much when the KOSPI 200 index declines. Individuals also made a net purchase of 37.99 billion KRW in KODEX Inverse.

Additionally, individuals bought 178.24 billion KRW worth of KODEX KOSDAQ150 Leverage and 69.89 billion KRW worth of KODEX KOSDAQ150. The KODEX KOSDAQ150 ETF tracks the KOSDAQ150 index, which consists of 150 leading companies on the KOSDAQ, while the KODEX KOSDAQ150 Leverage ETF delivers double the daily returns of the KOSDAQ150 index. According to Samsung Asset Management, individual net purchases of KODEX KOSDAQ150 reached 50.3 billion KRW in a single day on December 1. Expectations for government measures to revitalize the KOSDAQ market are seen as a key factor driving individual investors toward KOSDAQ ETFs. Lee Daehwan, a manager at Samsung Asset Management, analyzed, "Investor interest is focusing on the KOSDAQ, which has been undervalued compared to the KOSPI this year, due to expectations for KOSDAQ revitalization policies and forecasts that growth will continue, especially in bio-related stocks."

Meanwhile, foreign investors have been actively buying semiconductor-related ETFs. This month, foreign investors made a net purchase of 18.23 billion KRW in KODEX AI Semiconductor, making it their top pick. They also made a net purchase of 7.02 billion KRW in TIGER Semiconductor. The buying trend among foreigners is attributed to expectations that favorable conditions for semiconductor stocks will continue to drive earnings growth through next year. Noh Geunchang, Head of Research at Hyundai Motor Securities, commented, "Concerns about an AI bubble related to over-investment and overlapping investment in AI data centers may remind some of the network equipment sector during the 2000 IT bubble, but it is still too early to make such comparisons. Product price increases are expected to continue through the second quarter of next year due to inventory accumulation by clients, so Korean memory companies are likely to continue to post earnings surprises."

Individual investors have also been actively buying ETFs that invest in the U.S. market. The most purchased ETF by individuals this month was TIGER US S&P500, with a net purchase of 187.59 billion KRW. Other popular picks included KODEX US S&P500 (94.63 billion KRW), KODEX US Nasdaq100 (60.03 billion KRW), and TIGER US Nasdaq100 (43.46 billion KRW).