KOSDAQ fell 14.73% over the recent one month (920.57→785.00) as of July 8, according to Korea Exchange, prompting gains in inverse exchange-traded funds while the market marked its 30th anniversary in July. The decline was driven by investor concentration in semiconductor large-cap stocks, particularly after the May 27 launch of Samsung Electronics and SK Hynix single-stock leveraged products intensified the 'semiconductor large-cap bias' phenomenon. KOSDAQ's underperformance contrasts sharply with its earlier 2024 milestones—crossing 1000 on January 26 for the first time since 2022 and reaching 1200 on April 24 for the first time since August 2000—and reflects ongoing concerns over growth stock premium erosion, bio and secondary battery sector corrections, listed company quality issues, and rising delisting risks.
Inverse ETFs Post Double-Digit Gains on KOSDAQ Decline
Inverse ETFs betting on KOSDAQ's decline ranked among the top performers for domestic Korean-listed ETFs during the June 5 to July 7 period. KIWOOM KOSDAQ150 Futures Inverse recorded a 14.88% return, ranking third among domestic ETFs. KODEX KOSDAQ150 Futures Inverse gained 14.45% (fourth place), TIGER KOSDAQ150 Futures Inverse rose 14.32% (fifth place), and RISE KOSDAQ150 Futures Inverse increased 14.13% (sixth place). The KOSDAQ index's one-month decline of 14.73% slightly exceeded KOSPI's 13.67% drop (8394.65→7246.79) over the same period.
Leveraged ETFs Record Losses Up to 36.42%
Leveraged ETFs pursuing double the KOSDAQ's gains posted negative returns ranging from -35.19% to -36.42% during the recent one-month period. These products, designed to amplify the index's upward movements, suffered substantial losses as the market continued its downward trajectory.
KOSDAQ Crosses 1000 and 1200 Before Losing 800 Level
KOSDAQ crossed the 1000 level on January 26, entering 'Thousand-KOSDAQ' territory for the first time since January 2022. On April 24, the index surpassed 1200 for the first time since August 2000 during the dot-com bubble era. However, the index lost the 800 level on July 8, the first time it fell below that threshold since September 4 last year. Year-to-date, KOSDAQ declined 15.18% (925.47→785.00), contrasting with KOSPI's 71.96% gain (4214.17→7246.79).
Semiconductor Large-Cap Concentration Drives Decline Since May 27
Investor attention concentrated on semiconductor large-cap stocks following the May 27 launch of Samsung Electronics and SK Hynix single-stock leveraged products, which intensified the 'semiconductor large-cap bias' phenomenon and initiated the index's sustained decline. Additional factors contributing to investor disinterest include weakened growth stock premiums, corrections in bio and secondary battery sectors, listed company quality growth issues, and an increase in companies facing delisting concerns.
Korea Exchange Announces Delisting Strengthening and Segment System
At the KOSDAQ 30th anniversary ceremony, Korea Exchange announced plans to strengthen the delisting of weak and marginal companies and introduce a 'KOSDAQ Segment (tier) system' to differentiate quality companies. A Korea Exchange official stated that the coexistence of weak and quality companies in the KOSDAQ market has made it difficult to distinguish between them, contributing to the market's undervaluation, and that structural reforms aim to improve the market's fundamentals. The official noted that KOSDAQ, once called the 'cradle of venture myths,' now requires trust recovery for the overall market rather than individual stocks, and that clearing out weak companies and differentiating quality firms should drive trust recovery and capital inflows.
FAQ
What caused KOSDAQ's 14.73% decline over the recent one month?
The decline was driven by investor concentration in semiconductor large-cap stocks, particularly after the May 27 launch of Samsung Electronics and SK Hynix single-stock leveraged products intensified the 'semiconductor large-cap bias' phenomenon. Additional factors include weakened growth stock premiums, corrections in bio and secondary battery sectors, listed company quality issues, and rising delisting concerns.
Which inverse ETFs gained the most from KOSDAQ's decline?
KIWOOM KOSDAQ150 Futures Inverse recorded a 14.88% return (third place among domestic Korean-listed ETFs), followed by KODEX KOSDAQ150 Futures Inverse at 14.45% (fourth place), TIGER KOSDAQ150 Futures Inverse at 14.32% (fifth place), and RISE KOSDAQ150 Futures Inverse at 14.13% (sixth place) during the June 5 to July 7 period.
What reforms did Korea Exchange announce for KOSDAQ?
At the KOSDAQ 30th anniversary ceremony, Korea Exchange announced plans to strengthen the delisting of weak and marginal companies and introduce a 'KOSDAQ Segment (tier) system' to differentiate quality companies, aiming to improve market fundamentals and restore investor trust.
