Retail investors poured the most money into a double-leveraged inverse exchange-traded fund betting on falling stock prices during the week before South Korea's Chuseok holiday, as the domestic market closed for two days.
Individual investors net bought 129.6 billion won ($92 million) worth of KODEX 200 Futures Inverse 2X from the 16th to the 23rd, according to the Korea Exchange on the 24th. That was the largest net purchase by retail investors among all ETFs listed in South Korea during the period. They also net bought 13.9 billion won of the product on the 23rd, the last trading day before the holiday.
The fund tracks twice the inverse of the daily return of the KOSPI 200 futures index, and is commonly called a "double-short" product in South Korea. KODEX Inverse, which tracks the inverse of the KOSPI 200's daily return on an unleveraged, 1x basis, drew 100.9 billion won over the same week.
Retail investors also dumped products tracking the benchmark index. Net selling of KODEX 200, which tracks the daily return of the KOSPI 200 on an unleveraged, 1x basis, totaled 199.9 billion won from the 16th to the 23rd. Across the broader KOSPI market, retail net selling reached about 10 trillion won in the same period.
"The domestic market opened higher on the 23rd on the back of stabilizing declines in international oil prices, but gave back part of those gains as wait-and-see sentiment set in ahead of the holiday," said Lee Kyoung-min, an analyst at Daishin Securities. "Foreign and retail investors took profits ahead of Chuseok, while momentum in artificial intelligence chips held firm."
Market analysts said a U.S.-China summit scheduled for the 24th could be a key variable shaping the direction of global equities. "Even if the summit produces only broad statements, an extension of the truce between the two countries that expires on Nov. 9 would carry significant meaning as a reaffirmation of a tactical period of reconciliation," said Moon Nam-joong, an analyst at Daishin Securities. "That would support gains in global equities."
"What matters after the holiday is whether foreign investors return to buying chip stocks, and whether Samsung Electronics and SK hynix hold near their recent highs," said Lee Jae-won, an analyst at Yuanta Securities Korea. "This is a time to concentrate on the existing market leaders such as semiconductors and AI infrastructure."
