Samsung Asset Management's KODEX KOSDAQ150 Long KOSPI200 Short Futures ETF recorded a 55.6% decline in the first half of the year, marking the lowest return among domestic exchange-traded funds excluding leveraged and inverse products. The contrarian strategy of buying KOSDAQ and selling KOSPI backfired as the KOSPI200 index surged 126.2% while the KOSDAQ150 index rose only 7.5% during the same period. The ETF's structure involves purchasing KOSDAQ150 futures and selling KOSPI200 futures, resulting in losses when the sold position significantly outperformed the purchased position.
KODEX ETF Structure Drives 55.6% Loss in First Half
According to a comprehensive analysis of 1,044 ETFs traded on the Korean stock market from the last trading day of last year through the end of June, based on Korea Exchange market data from the 13th, the KODEX KOSDAQ150 Long KOSPI200 Short Futures price fell 55.6% during this period. The ETF, listed on August 21, 2020, by Samsung Asset Management, tracks a benchmark index of 100% KOSDAQ150 long and 100% KOSPI200 short futures positions.
The product's structure seeks profits when KOSDAQ150 rises more than KOSPI200 or falls less. Even when both markets rise, losses can occur if KOSPI200's gains exceed those of KOSDAQ150, as selling position losses surpass buying position profits. This year exemplified this scenario: while the KOSPI200 index climbed 126.2% in the first half, the KOSDAQ150 index's gain remained at 7.5%. The purchased side delivered single-digit returns while the sold component more than doubled, amplifying losses.
The market gap appeared more clearly in the opposite product. Samsung Asset Management's KODEX 200 Long KOSDAQ150 Short Futures, which buys KOSPI200 and sells KOSDAQ150, rose 99.0% during the same period. The two products with opposite market directions occupied the extreme ends of first-half ETF returns.
Net Assets Grow 5.1% Despite Price Decline
Despite the price decline, asset size did not shrink. Net assets totaling 13.3 billion won on the last trading day of last year increased to 14 billion won by the end of June, a 5.1% rise. The maintenance of net assets despite a price drop exceeding 50% resulted from new ETF shares being created. This is interpreted as capital inflows betting on the possibility of easing KOSPI large-cap concentration and relative strengthening of KOSDAQ.
Future performance likewise depends on relative strength between the two markets rather than their absolute direction. Even if KOSDAQ150 rebounds, losses can continue if KOSPI200's upward momentum proves steeper. Conversely, if buying interest shifts to small and mid-cap stocks while large caps pause, prices could recover quickly.
Analysts Note KOSDAQ Rebound Possibility Amid Large-Cap Correction
Since July, large semiconductor stocks that led KOSPI200 have undergone correction. Based on closing prices from the end of last month to the 9th, Samsung Electronics and SK Hynix stock prices fell 16.8% and 17.5% respectively. Expectations remain that KOSDAQ150's relative strength could improve as stocks that drove first-half index gains take a breather.
The securities industry is keeping the possibility of a KOSDAQ rebound open. Kim Jun-young, researcher at iM Securities, stated, "We are in a phase where confidence in memory companies is gradually weakening," explaining, "As time passes, a period emerges where KOSDAQ companies' expected returns relative to risk increase."
However, Kim added, "If we view KOSDAQ's rebound as the start of a trend rally, the conclusion that the artificial intelligence-led rally fronted by Samsung Electronics and SK Hynix has ended must be established first."
FAQ
What caused the KODEX KOSDAQ150 Long KOSPI200 Short Futures ETF to fall 55.6% in the first half?
The ETF declined because the KOSPI200 index rose 126.2% while the KOSDAQ150 index gained only 7.5% during the same period. Since the product buys KOSDAQ150 futures and sells KOSPI200 futures, the sold position's strong performance generated losses that exceeded gains from the purchased position.
Why did net assets increase despite the ETF's price falling by more than half?
Net assets grew 5.1% from 13.3 billion won to 14 billion won because new ETF shares were created through capital inflows. Investors betting on the possibility of easing KOSPI large-cap concentration and relative strengthening of KOSDAQ added funds to the product.
What did analysts say about KOSDAQ's future performance?
Kim Jun-young, researcher at iM Securities, stated that confidence in memory companies is gradually weakening and that a period emerges where KOSDAQ companies' expected returns relative to risk increase. However, he noted that viewing KOSDAQ's rebound as the start of a trend rally requires establishing that the artificial intelligence-led rally fronted by Samsung Electronics and SK Hynix has ended.
