KO KOSDAQ leveraged ETF Loading... : Investor Sentiment and Bull/Bear Views

KOSDAQ's regime has shifted with massive institutional buying and retail deposits; because rotation is fast, the index or leveraged index is safer than single stocks.

The speaker warns that KOSDAQ leveraged ETFs are dangerous in this fast, liquidity-driven surge. Investors rushed into them on KOSDAQ 3,000 hopes, but leverage can produce enormous volatility and a sharp plunge if the market reverses, and leveraged products fall twice as hard. He advises using plain index or sector ETFs instead of leveraged products.

Foreign and institutional money is rotating out of KOSPI into KOSDAQ, with foreigners net-buying KOSDAQ for three straight sessions while retail sells into the rally. The speaker expects this to continue because the government and ruling party's KOSDAQ 3,000 pledge has policy credibility after the KOSPI 5,000 target was reached, the weaker won lowers foreign investors' FX-loss concerns, and limited domestic funds are rotating from a highly risen KOSPI into KOSDAQ. He advises following foreign/institutional flows and buying KOSDAQ; for investors who want broad exposure, holding the KOSDAQ index or a KOSDAQ leveraged ETF is a convenient way to participate if KOSDAQ repeats KOSPI's rise.