Exhausted Donghak Ants Turn Their Eyes to Inverse ETFs Amid Boxpi Slump

Bought 110 Billion Won Worth of Gobus in One Day
Trading Volume and Individual Investor Share Both Plummet Amid Sideways Market and Cooling Sentiment

[Asia Economy Reporter Minwoo Lee] As the KOSPI struggles to maintain an upward trend and fluctuates sideways, individual investors' sentiment appears to be cooling somewhat. The average daily trading volume has sharply decreased, and when the index slightly rebounds, individual investors are quickly buying large amounts of so-called ‘Gopbus’ (a combination of ‘multiply’ and ‘inverse’), expecting the index to fall again.

According to the Korea Exchange on the 3rd, among the top net purchase stocks by individual investors up to the previous day this month, ‘KODEX 200 Futures Inverse 2X’ ranked second with net purchases of 120.8 billion KRW. This product is an inverse leveraged exchange-traded fund (ETF) managed by Samsung Asset Management that tracks twice the inverse of the KOSPI 200 index. If the KOSPI 200 index rises by 1%, this ETF falls by 2%, and if the index falls by 1%, the ETF rises by 2%. Individual investors bought 110.9 billion KRW worth of this so-called ‘Gopbus’ ETF on the previous day alone, when the KOSPI closed up more than 1%. This was the largest single-day net purchase since August 31.

Other products that track index declines, such as ‘KODEX Inverse (24.5 billion KRW, 7th place)’ and ‘KODEX KOSDAQ 150 Futures Inverse (13.1 billion KRW, 14th place),’ also appeared among the top net purchases by individuals. As the index fails to break out of its sideways trend, even small rebounds prompt a rush to buy stocks that track index declines. In fact, the KOSPI has been fluctuating without recovery since it fell below the 3100 level intraday on September 28. On the 12th of last month, it dropped to as low as 2901.51 intraday, threatening the 2900 level, before recovering to the 3000s, but the index has been unable to shift to an upward trend as it continues to fluctuate every other day. At around 9:18 a.m. on the day, it recorded 2996.91, falling back below the 2900 level.

In this situation, investor sentiment is also freezing. According to the Korea Exchange, the average daily trading volume of the KOSPI last month was 11.7538 trillion KRW, the lowest level in a year since October last year’s 10.847 trillion KRW. Compared to 14.0614 trillion KRW in the previous month, it decreased by about 2.3 trillion KRW in one month. Compared to 26.4778 trillion KRW in January this year, it has sharply dropped by about 15 trillion KRW.

The active ‘Donghak Ant Movement’ of individual investors has also weakened. As of last month, the proportion of individual trading volume in the total trading volume of the KOSPI market was 58.1%, the lowest since March last year’s 53.1%. The 60% range, which had been maintained for 18 consecutive months from April last year to September this year, has collapsed. Compared to 72.2% in July last year, it fell by about 14 percentage points. Although individuals still acted as net buyers with 2.8302 trillion KRW in net purchases last month, their trading activity was not vigorous.

With the sideways market continuing and recent concerns about interest rate hikes emerging, individual investors’ sentiment appears to have significantly contracted compared to the past. Professor Young-ik Kim of Sogang University Graduate School of Economics explained, “Individual investors who participated when the index rose significantly last year and enjoyed high returns seem to have become much more cautious as the index has struggled to rebound recently. The stagnation of investor deposits and the inflow of money back into equity funds, which had previously seen outflows, also indicate that individual investors are finding direct investment challenging.”

This content was produced with the assistance of AI translation services.