South Korean retail investors sharply reversed ETF positions across two trading
days, buying inverse ETFs on index rallies and flipping to leveraged ETFs on the
KOSPI's crash. Data from Koscom and Timefolio Asset Management on the 16th show
the top retail net buys were KODEX SK Hynix single-stock leveraged ETF 265 bn
won, KODEX Leverage ETF 197.4 bn won and TIGER SK Hynix single-stock leveraged
ETF 124.1 bn won; the KOSPI fell 6.37% and SK Hynix plunged 11.53% that day. The
biggest retail net sells were the KODEX 200 Futures Inverse 2x ETF 136.3 bn won,
SOL SK Hynix Futures Single-Stock Inverse 2x ETF 96.4 bn won and KODEX Inverse
ETF 46.9 bn won. Flows on the prior trading day (15th) were almost exactly
opposite. Market participants note single-stock leveraged ETFs are high-risk and
losses can be multiplied in extreme volatility.
