As the KOSDAQ market improves, bio-related exchange-traded funds (ETFs) have recently dominated the top returns. Analysts suggest that if capital continues to flow into the KOSDAQ, the strong performance of related ETFs is likely to persist due to the market's high concentration in bio stocks.
According to KOSCOM ETF Check on August 7, the second highest return over the past week, excluding leveraged and inverse products, was Hyundai Asset Management's 'UNICORN K-Bio Active,' which rose by 24.90%. Following closely was 'TIGER KOSDAQ 150 Biotech' at 23.08%, while 'ACE K-Bio KOSDAQ Active' (5th, 21.21%), 'TIGER Technology Transfer Bio Active' (7th, 20.91%), 'RISE Bio TOP 10 Active' (8th, 20.30%), and 'KoAct Bio Healthcare Active' (9th, 20.26%) also made the list. Half of the top 10 ETFs by return over the past week were bio ETFs.
The strong performance of bio ETFs is attributed to a shift in investor sentiment towards the KOSDAQ. The KOSDAQ index closed at 798.81, down 2.86 points (0.36%) from the previous trading day, marking a decline after six consecutive days of increases. However, major bio stocks in the KOSDAQ, such as Alteogen (3.92%), HLB (5.97%), ABL Bio (3.96%), and LigaChem Bio (2.07%), all saw gains, supporting the strength of related ETFs.
Market analysts are noting a shift in the KOSDAQ's supply and demand structure. Kwon Beom-seok, a senior researcher at Samsung Securities, stated, "Many market participants have identified the concentration of supply and demand in large-cap stocks as a major cause of the KOSDAQ's sharp decline. The frequent mention of leveraged ETFs absorbing market funds has also been noted." He added that the increase in surrounding market funds, such as deposit funds, has created a favorable environment for KOSDAQ supply and demand following the early implementation of remedial measures. Kwon also highlighted that foreign investors have shown a proactive buying trend in the KOSDAQ market since the announcement of strengthened delisting criteria, which is a positive factor for the supply and demand environment.
Park Woo-yeol, a researcher at Shinhan Investment Corp, remarked, "With the decrease in trading of single-stock leveraged ETFs, the KOSDAQ has entered a phase where a reversal from oversold positions is possible. Individual investors have shifted their net purchases from stocks to ETFs." He noted that given the KOSDAQ's high concentration in the bio sector, the bio industry is likely to benefit the most from any rebound in the index.
Additionally, the upcoming restructuring of the KOSDAQ market is expected to support long-term investor sentiment. The 'uplisting' system, set to be introduced in January 2027, will classify KOSDAQ-listed companies into 'select, standard, and managed' categories, moving high-quality firms to a higher market tier while relegating less competitive companies to a lower tier. This system aims to enhance market competitiveness and is anticipated to create positive policy momentum.
Gang Jin-hyuk, a researcher at Shinhan Investment Corp, noted, "This year, KOSDAQ biotech has been decoupling from U.S. biotech. With renewed expectations for technology transfers starting with Alteogen, if segment visibility increases, it is expected to recover from previous underperformance."
* This article has been translated by AI.
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