It was found that domestic individual investors (Seohak ants) investing in overseas stocks bought a large number of 2~3x ETFs, an ultra-high-risk investment product last month. While technology stocks are being adjusted, there is a movement to make up for losses in the short term with more aggressive investments rather than defending the returns with value stocks. However, due to market volatility, these 2~3x leveraged ETFs also performed very poorly.
According to statistics on foreign currency securities deposits and settlement of Korea Securities Depository on the 6th, the total domestic net purchase of FNGU ETN (listed index securities) last month was $2253.8 million (about KRW 254.3 billion), followed by Tesla ($23.198 million). Written above.
FNGU is an ETN that follows three times the stock price of’FANG+’ such as Facebook, Apple, Amazon, Netflix, and Google. A 1% rise in the FANG+ index yields 3% profit, while a 1% decline results in a 3% loss.
FNGU’s momentum last month was scary. Tesla maintained its position as the number one net buying stock for six months from October last year, but the gap with FNGU was only $6.6 million (KRW 7.4 billion). FNGU was the No. 1 item in monthly net purchases in March until the 30th of last month, and was overtaken by Tesla on the 31st, the last day.
Not only FNGU, but also leveraged ETF (listed-indicated funds) and ETH ranked in the top positions. Last month, the fourth place in monthly net purchases was SOXL (net purchase amount of $179.96 million), which follows three times the Philadelphia Semiconductor Index, the eighth place is TQQQ ($73.05 million), which follows three times the Nasdaq 100 index, and the 9th place is in the U.S. It was TBT (US$72.65 million), following -2 times the yield of 20-year Treasury bonds.
The total purchase amount of these four leveraged ETFs and Etns amounted to $550.7 million (621.4 billion won). Leveraged ETFs have often appeared in the top net buying stocks because of the aggressive tendency of Seohak ants to invest, but it is very unusual to go to net buying in such a pile. In January, among the top 10 net buying stocks, there was no leveraged ETF, and in February, only one SOXL stock was listed.
It is interpreted that the reason that the funds of Seohak ants flocked to such a high-risk leveraged ETF/ETN was due to a sharp adjustment in US technology stocks, such as a drop of nearly 20% in Tesla last month. It is an analysis that the desire to make up for the loss of technology stock in a short period of time has grown. Seohak ants also net sold US$23.53 million (about 26.5 billion won) of Cash Wood’s ARKK ETF, which is a leading investment in technology stocks.
The problem is that the yields of these leveraged ETFs are very sluggish. As the volatility of the market expands, ETFs that follow two to three times the index are less than the returns of ETFs that follow one times the index. In general, leveraged ETFs are profitable only when the index steadily rises or falls. In a volatility market where soaring and plunging are repeated, losses increase.
FNGS, which follows the FANG+ index, posted a return of -6.67% in the past month, while FNGU, which follows the FANG+ triplex, is recording -22.10%. SOXX, a product that follows the Philadelphia Semiconductor Index, is -0.30%, and SOXL, a three-fold leverage product, has a one-month yield of -7.50%. QQQ, which tracks 1x the NASDAQ 100 index, and TQQQ, tracks 3x, also showed 0.69% and -0.69% for the last month, respectively.
[고득관 매경닷컴 기자 [email protected]]
[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]