Nineteen of the top 50 overseas stocks (including ETFs and ETNs) purchased by Korean retail investors in August were 18 ETFs and 1 ETN, according to data from the Korea Securities Depository. Eleven of the nineteen ETFs and ETN on the top 50 list provide leverage of inverse exposure.
Six of the top 10 purchases were in overseas ETFs that provide leverage or inverse exposure. The largest purchase was US$1.46 billion of the Direxion Daily 20+ Year Treasury Bull 3X Shares ETF, listed in the United States.
Source: Korea Securities Depository
The use of leverage and inverse ETFs in South Korea is also significant when looking at the local ETFs industry in South Korea. There are 1,134 ETFs, with assets of US$90 Bn, from 33 providers listed in the Korea Exchange at the end of August, according to data from ETFGI.
Twenty-eight percent of the ETFs provide leverage or inverse ETFs. These ETFs account for 14.7% of the assets in the ETFs industry in South Korea.
Looking at the global ETFs industry leverage and inverse ETFs account for 10.46% of the 11,510 products but only 1.16% of the US$10.70 trillion in assets under management at the end of August.
