KOSDAQ Market Expands 5.3-Fold in 30 Years But Index Declines; Capital Flows to Semiconductor Leverage ETFs

According to Newsis, on July 11, South Korea's KOSDAQ market has expanded significantly since its launch in 1996, with listed companies growing from 343 to 1,819. However, the index has declined rather than grown, retreating to levels from 10 months ago. This marks a fundamental divergence between market size and performance.

Investor capital is increasingly bypassing KOSDAQ mid-cap and small-cap stocks in favor of semiconductor leverage exchange-traded funds (ETFs). KOSDAQ's daily average trading volume reached 7.32 trillion Korean won in early July, down 50 percent from 14.91 trillion won in January. Meanwhile, margin credit balances in KOSDAQ total only 8.11 trillion won, roughly one-third of KOSPI's 29.68 trillion won, indicating that even leveraged investors are avoiding the market. Single-stock leverage ETFs tracking Samsung Electronics and SK Hynix have accumulated 361.49 trillion won in trading value since their May launch.