Investors in inverse funds are seeing a rare upturn this month. All ten of the top-performing ETFs (exchange-traded funds) in July are inverse products, with those betting on declines in KOSPI futures and Samsung Electronics and SK Hynix leading the pack.
This month, the performance of 'leveraged inverse' products has stood out. Leveraged inverse funds track the daily price movements of an underlying index or stock in the opposite direction at double the rate.
According to the Korea Exchange on July 17, the 'SOL SK Hynix Futures Single Stock Inverse 2X' recorded a return of 54.08% this month, ranking first among all ETFs. Its trading volume reached approximately 34.7 trillion won, placing it second overall among ETFs. The 'PLUS Samsung Electronics Futures Single Stock Inverse 2X' also performed well, achieving a return of 45.81% and securing fourth place.
The remaining top spots were occupied by products that inversely track the KOSPI 200 futures index at double the rate. The 'TIGER 200 Futures Inverse 2X' and 'PLUS 200 Futures Inverse 2X' ranked second and third, respectively, with returns of 47.22% and 46.76%. They were followed by 'RISE 200 Futures Inverse 2X' (45.07%), 'KODEX 200 Futures Inverse 2X' (44.93%), and 'KIWOOM 200 Futures Inverse 2X' (44.78%).
Inverse products that track the KOSPI index's decline at a 1:1 ratio also yielded high returns. 'HANARO 200 Futures Inverse' and 'KIWOOM 200 Futures Inverse' rose by 25.73% and 23.49%, respectively. 'TIGER Inverse' recorded a return of 22.90%.
Trading activity has also concentrated on inverse products. The Korea Exchange reported that the 'KODEX 200 Futures Inverse 2X' was the most traded product this month, with 1.366 billion shares exchanged. It was followed by 'SOL SK Hynix Futures Single Stock Inverse 2X' (361 million shares) and 'TIGER 200 Futures Inverse 2X' (157 million shares). The 'PLUS Samsung Electronics Futures Single Stock Inverse 2X' also made the top ranks with 23.2 million shares traded.
Additionally, 'KIWOOM 200 Futures Inverse 2X' (54.2 million shares), 'RISE 200 Futures Inverse 2X' (35.1 million shares), and 'PLUS 200 Futures Inverse 2X' (10.5 million shares) saw active trading. The 1:1 inverse product 'TIGER Inverse' (66.5 million shares), 'KIWOOM 200 Futures Inverse' (1.43 million shares), and 'HANARO 200 Futures Inverse' (380,000 shares) also ranked among the top ten in trading volume.
Market analysts caution against the strategy of repeatedly trading leveraged and inverse products. In volatile market conditions, losses from directional trading can accumulate quickly.
An industry insider stated, "The market has been exhibiting extreme volatility, with significant fluctuations occurring even within a single day. The risk of getting caught up in volatility while trying to predict short-term direction is high, so investors should exercise particular caution with leveraged and inverse products."
* This article has been translated by AI.
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