Retail investors in South Korea moved capital into US index ETFs during the past week amid domestic market volatility, ETF Check data showed on May 27. Daily KOSPI swings exceeded 3% on all but one day last week, despite a 1.91% weekly decline. South Korea's Financial Services Commission raised basic deposit requirements for leveraged ETF trading from 10 million won to 30 million won on May 16, advancing implementation from next month to May 31 in a May 24 announcement.
Retail Investors Pour 329.6 Billion Won into US Index ETFs
TIGER US S&P500 topped individual net purchases at 120.3 billion won during the week ending May 27, according to ETF Check. KODEX US Nasdaq100 attracted 85.1 billion won, KODEX US S&P500 drew 65.1 billion won, and TIGER US Nasdaq100 recorded 59.1 billion won in net buying. The four US index products combined attracted 329.6 billion won in retail inflows.
The S&P500 index fell 0.66% and the Nasdaq100 declined 0.48% during the same week. The KOSPI dropped 1.91% weekly but recorded daily moves exceeding 3% on all but one trading day.
KOSPI Inverse Products Attract 143.3 Billion Won as Leveraged Funds See Outflows
Retail investors net purchased 74.5 billion won of KODEX 200 Futures Inverse 2X and 68.8 billion won of KODEX Inverse during the week. KODEX Leverage recorded 129 billion won in net selling, KODEX 200 saw 106.6 billion won in outflows, and TIGER 200 experienced 17.1 billion won in net sales. Total outflows from the three KOSPI index products exceeded 250 billion won.
KODEX KOSDAQ150 Leverage attracted 76.6 billion won in net purchases as investors positioned for a technical rebound in the KOSDAQ market.
Single-Stock Leveraged ETFs Record 327.7 Billion Won in Net Selling
KODEX SK Hynix Single Stock Leverage led individual net sales at 159.2 billion won during the week. TIGER SK Hynix Single Stock Leverage recorded 78.8 billion won in outflows, KODEX Samsung Electronics Single Stock Leverage saw 44.9 billion won in net selling, and TIGER Samsung Electronics Single Stock Leverage experienced 44.8 billion won in sales. The four single-stock leveraged products combined recorded 327.7 billion won in net outflows.
SOL SK Hynix Futures Single Stock Inverse 2X, which doubles returns when SK Hynix stock falls, attracted 98.9 billion won in net purchases, ranking second overall in individual buying.
FSC Advances Leveraged ETF Deposit Requirement to May 31
The Financial Services Commission announced on May 16 measures to raise the basic deposit requirement from 10 million won to 30 million won, exclude substitute securities from deposit calculations, and expand trading unit size from 1 share to 20 shares. On May 24, the FSC moved the implementation date forward from next month to May 31.
Lee Sang-hyun, researcher at Meritz Securities, stated the basic deposit increase and trading unit expansion would calm market overheating. He described the measures as minimum steps for investor protection despite potential barriers to trading.
FAQ
What US index ETFs did Korean retail investors buy during the week ending May 27?
TIGER US S&P500 led net purchases at 120.3 billion won, followed by KODEX US Nasdaq100 at 85.1 billion won, KODEX US S&P500 at 65.1 billion won, and TIGER US Nasdaq100 at 59.1 billion won, totaling 329.6 billion won across the four products.
When did South Korea's Financial Services Commission announce changes to leveraged ETF deposit requirements?
The FSC announced on May 16 an increase in basic deposit requirements from 10 million won to 30 million won. On May 24, the commission advanced the implementation date from next month to May 31.
