Two of the top five net deposit increases are money market active… Covered call in a market with a sharp drop of more than 5%
Inverse and interest rate ETFs have a ‘low tide’ of funds… “As stock market volatility increases, demand for standby funds increases.”
(Seoul = Yonhap News) Reporter Go Eun-ji = Recently, when stock prices plummeted for seven trading days and fell to the 5,500 level at one point, funds poured into so-called 'defensive' exchange traded funds (ETFs) that can avoid the downtrend.
According to Koscom CHECK and financial information company FnGuide [064850] on the 18th, two of the top five domestically listed ETFs with net setup and redemption amount increase from the 9th to the 16th were money market active. The net setup/redemption amount is the ETF setup amount minus the redemption amount, and shows the size of the inflow or outflow of investment funds.
Money Market Active is a product that pursues both stability and liquidity by investing in short-term high-quality securities or commercial paper (CP), and is classified as a type of 'parking-type' financial product that rolls in short-term funds before deciding on an investment destination.
KODEX Money Market Active [488770] received KRW 574.4 billion in one week, the second largest net deposit after 'KODEX Leverage' (KRW 642.7 billion). TIGER Money Market Active ranked 5th with 304.3 billion won.
‘KODEX 200’ (KRW 407.5 billion) took second place, and ‘KODEX 200 Target Weekly Covered Call’ (KRW 359.8 billion) took fourth place.
It is interpreted that as stock prices fell significantly in the short term, money poured into products that 'bet' on a rise in the index and parking products that allow you to observe market trends for a while.
On the 13th or 15th, when stock prices fell by more than 5% in one day, a lot of money flowed into covered calls as well as money market activity.
For example, the net increase in 'KDOEX 200 Target Weekly Covered Call' amount reached KRW 137 billion, the largest among all ETFs on the 13th, and KRW 72.2 billion, the 7th largest on the 15th.
On the other hand, a lot of money was withdrawn from inverse and interest rate ETFs that can make profits when the index falls.
'KODEX 200 Futures Inverse 2X', which tracks the daily return of the KOSPI 200 index by -2 times, had the largest decrease in net investment at -161.6 billion won, and 'KODEX Inverse' also ranked 4th with a decrease of 115.9 billion won.
'TIGER CD Interest Rate Investment KIS (Synthetic)' (-KRW 152.5 billion) and 'KODEX KOFR Interest Rate Active (Synthetic)' (-KRW 94.8 billion) ranked 3rd and 5th, respectively.
As interest rates on U.S. Treasury bonds have recently risen sharply, sentiment that a short-term adjustment may occur appears to have increased.
Experts judged that as stock market volatility increases, money will flow into defensive stocks and similar financial products for the time being.
Sujin Han, a researcher at Samsung Securities, pointed out, “As uncertainty about the direction of the Korean stock market increases, the demand for standby funds has expanded,” adding, “As a result, the number of parked ETFs is increasing at the top of the domestic market.”
Park Woo-yeol, a researcher at Shinhan Investment & Securities, analyzed, "As global stock market volatility increases, ETF funds are headed to ultra-short-term bonds and parked ETFs, regardless of domestic or foreign markets. Among domestically listed ETFs, KODEX Money Market Active's net buying trend over the past three months was the steepest, and in the United States, funds were also directed to 0-3 month short-term government bond ETFs."
