During a sharp correction that saw South Korea’s stock market plunge more than 20% in roughly one month, inverse 2x leveraged exchange-traded funds (ETFs) betting on the downturn swept the top of the performance charts. Meanwhile, retail investors took the opposite approach, aggressively buying the dip on major semiconductor stocks and leveraged ETFs in massive volumes.

According to ETF Check on July 19, the ‘RISE 200 Futures Inverse 2X’ ranked first among domestic ETFs in South Korea for the one-month period from June 17 to July 16, posting a staggering return of 41.10%. This product is designed to track double the daily decline of the KOSPI 200 futures index. During the same period, the KOSPI 200 futures index fell 21.8% from 1,403.10 to 1,096.35, while the KOSPI index mirrored that decline, dropping from 8,726.60 to 6,820.60.

The dominance of inverse 2X ETFs completely swept the top performance rankings. The ‘KODEX 200 Futures Inverse 2X’ returned 40.85%, and the ‘TIGER 200 Futures Inverse 2X’ delivered 38.96%, with products betting on the KOSPI’s decline occupying the first through fifth spots. In sixth place was the ‘PLUS Samsung Electronics Futures Single Stock Inverse 2X,’ designed to generate double the returns from a decline in Samsung Electronics’ share price, with a gain of 36.07%. During this period, Samsung Electronics’ stock plummeted from 343,000 won to 279,500 won.

Four ‘KOSDAQ 150 Futures Inverse’ products (TIGER, KIWOOM, KODEX, RISE), which profit from declines in KOSDAQ 150 futures, also posted returns of around 25%, securing the seventh through tenth positions.

Excluding inverse products, China biotech-related ETFs delivered notable performance. The ‘TIGER China Biotech SOLACTIVE’ led with a 20.62% return, while the ‘KoAct China Bio Healthcare Active’ recorded an 18.81% gain. The ‘TIGER Global AI Cybersecurity’ ETF, which invests in artificial intelligence cybersecurity companies worldwide, also showed strong performance with a 17.09% return, proving the resilience of thematic ETFs even in a correction.

While the top of the performance charts was filled with inverse products, retail investor funds flowed in the exact opposite direction. The product attracting the largest net buying from individual investors during the same period was the ‘KODEX SK hynix Single Stock Leverage’ ETF, which saw a massive inflow of 2.48 trillion won (approximately $1.7 billion). This was followed by 1.2 trillion won (approximately $810.0 million) into the ‘TIGER SK hynix Single Stock Leverage’ and 1.14 trillion won (approximately $767.3 million) into the ‘KODEX Samsung Electronics Single Stock Leverage,’ demonstrating concentrated buying in leveraged products tied to major semiconductor names. The ‘KODEX KOSDAQ 150 Leverage’ also attracted 1.08 trillion won (approximately $722.9 million), while the ‘SOL AI Semiconductor TOP2 Plus’ and ‘KODEX AI Semiconductor TOP2 Plus’ drew inflows of 750.6 billion won (approximately $504.6 million) and 625.7 billion won (approximately $420.6 million), respectively.

Foreign investors showed the strongest preference for the ‘TIGER MSCI KORER TR,’ which provides diversified exposure to 100 major South Korean large-cap stocks, with net purchases of 654.5 billion won (approximately $440.0 million). This was followed by the ‘TIGER Samsung Electronics Single Stock Leverage’ at 403.6 billion won (approximately $271.3 million), the ‘KODEX Samsung Electronics Single Stock Leverage’ at 335.3 billion won (approximately $225.4 million), and the ‘TIGER SK hynix Single Stock Leverage’ at 254.9 billion won (approximately $171.4 million).

The fund flows over this one-month period reveal that retail investors actively seized the opportunity to buy core semiconductor stocks at discounted prices during the correction. While the explosive returns of inverse ETFs proved that short-term strategies betting on the sharp downturn were effective, a clear polarization emerged: retail investors’ capital remained overwhelmingly concentrated on bets for a rebound.