Korean domestic stock funds experienced sharp losses during the week of July 3-9, with only 48 out of 3,861 funds posting gains as the average return fell 6.60%. The decline was driven by profit-taking in large-cap semiconductor stocks and a steep selloff in KOSDAQ growth stocks, which saw the KOSDAQ 150 index plummet 10.28% compared to a 4.09% drop in the KOSPI 200. Long-short strategy funds combining KOSPI 200 long positions with KOSDAQ 150 short positions, along with high-dividend and covered call funds, outperformed during the downturn. Semiconductor peak-out concerns following Samsung Electronics' earnings release and foreign investor outflows contributed to the broad market weakness, according to fund evaluation firm KG Zeroin.
KODEX Long-Short Fund Gains 5.90% on Index Spread
Samsung Asset Management's 'KODEX 200Long KOSDAQ150Short Futures' ETF rose 5.90% during the week, claiming the top spot among domestic stock funds with assets exceeding 10 billion won. The fund's one-month return reached 7.27%, with a year-to-date gain of 98.94%. The long-short strategy buys KOSPI 200 futures while selling KOSDAQ 150 futures, profiting from the relative performance gap between the two indexes. The KOSPI 200's 4.09% decline was significantly smaller than the KOSDAQ 150's 10.28% drop, widening the spread between the long and short positions and generating returns.
Dividend Funds Claim Four of Top Five Spots
KB Asset Management's 'RISE 200 High Dividend Covered Call ATM' ETF ranked second with a 3.09% weekly gain. Samsung Asset Management's 'KODEX High Dividend Stock' ETF rose 2.34%, followed by the 'KODEX Shareholder Return High Dividend Stock' ETF at 2.30%. Hanwha Asset Management's 'PLUS Treasury Stock Purchase High Dividend Stock' ETF gained 1.48%. Four of the top five performing funds employed dividend or shareholder return strategies. Among the 3,861 domestic stock funds tracked by KG Zeroin, only 48 posted gains, representing 1.2% of the total. Just 799 funds outperformed the KOSPI index, roughly one in five.
Semiconductor Profit-Taking Drives 4.66% KOSPI Decline
The KOSPI fell 4.66% during the week as profit-taking spread across Samsung Electronics (005930) and SK Hynix (000660) following the AI and semiconductor rally. Despite Samsung Electronics' solid earnings announcement, concerns emerged that semiconductor profit growth could slow, intensifying selling pressure. The large-cap index declined 4.58%, while the mid-cap index dropped 6.28%. The KOSDAQ index plunged 8.39%, exceeding the KOSPI's decline as selling expanded across semiconductor components, secondary batteries, and biotech growth stocks. Geopolitical uncertainties in the Middle East and rising US interest rates further dampened investor sentiment. Among domestic stock fund categories, dividend stock funds fell 3.75%, showing relative resilience. K200 index funds dropped 4.14%, general stock funds declined 5.99%, and small-mid cap stock funds posted the steepest loss at 8.36%.
Domestic Stock Funds Record 131.9 Billion Won Net Inflows
Excluding ETFs, domestic stock funds saw assets under management increase by 131.9 billion won to 20.096 trillion won during the week. However, net asset value declined by 3.131 trillion won to 59.146 trillion won due to market losses. Bond fund assets under management rose by 584.1 billion won to 32.015 trillion won, with net asset value increasing by 567.6 billion won to 31.958 trillion won. Money market fund (MMF) assets under management surged by 7.683 trillion won to 178.242 trillion won. Overseas stock funds posted an average return of -4.82% during the week, affected by profit-taking in AI-related tech stocks and won appreciation. The won-dollar exchange rate fell 3.19% during the week, pressuring overseas fund returns when converted to won.
FAQ
What was the top-performing Korean domestic stock fund during July 3-9?
Samsung Asset Management's 'KODEX 200Long KOSDAQ150Short Futures' ETF gained 5.90% during the week, ranking first among domestic stock funds. The fund's long-short strategy profited from the performance gap between the KOSPI 200, which fell 4.09%, and the KOSDAQ 150, which dropped 10.28%.
Why did most Korean stock funds decline during the week of July 3-9?
The average domestic stock fund fell 6.60% as profit-taking hit large-cap semiconductor stocks like Samsung Electronics and SK Hynix, while KOSDAQ growth stocks experienced a steep selloff. Only 48 out of 3,861 funds posted gains, with semiconductor peak-out concerns and foreign investor outflows driving the broad market weakness.
