Institutions post 5.2 trillion won in net purchases over two days, driving Kospi above 8,900; single-stock leveraged ETFs draw massive inflows as total ETF market cap reaches 517 trillion won
The Kospi surged past 8,900 during intraday trading Monday, putting the 9,000 mark within striking distance. Analysts point to explosive institutional buying as the primary driver of the recent rally, with institutions posting more than 5 trillion won (about $3.31 billion) in net purchases over the past two trading sessions. The buying is widely seen as a reflection of the booming exchange-traded fund market.
Combined institutional net purchases on the Kospi — including both the Korea Exchange and alternative trading venues — reached approximately 2.7 trillion won on May 29 and about 2.5 trillion won on June 1, for a two-day total of 5.2 trillion won. Institutions continued their net buying Monday morning, offsetting net selling by foreign investors.
The financial investment sector led the institutional buying. It purchased a net 2.2 trillion won on May 29 and 2.6 trillion won on June 1, accounting for 4.8 trillion won over the two days — the bulk of total institutional net purchases.
Market participants attribute the large-scale institutional buying to the rapid expansion of the ETF market. When retail investors pour money into ETFs, liquidity providers and authorized participants must purchase the underlying assets as part of the ETF creation and hedging process.
Those spot-market purchases are recorded as financial investment sector net buying, inflating the overall institutional net purchase figure. In simple terms, as individual investors bought ETFs, brokerages bought the component stocks to back them — and that showed up as institutional net purchases.
The segment drawing the most attention within the ETF market is single-stock leveraged ETFs. Products tracking Samsung Electronics and SK Hynix have recorded particularly high trading volumes.
In the three trading days after single-stock leveraged ETFs launched on May 27, the KODEX SK Hynix Single-Stock Leveraged ETF logged 10.9258 trillion won in trading value, ranking first among all domestic ETFs. The 16 single-stock leveraged and inverse ETF products listed during the same period combined for 27.8710 trillion won in trading value.
Analysts say short-term trading demand has concentrated in these products, driven by strength in the semiconductor sector and growing expectations for expanded AI investment.
The broader ETF market is also expanding at a rapid clip. The domestic ETF market cap crossed 500 trillion won on May 27 — roughly 24 years after ETFs were first introduced on the Korean stock market in October 2002.
The pace of recent growth is particularly striking. After surpassing 400 trillion won on April 15, the ETF market cap added another 100 trillion won in just 42 days to break through the 500 trillion won threshold.
The ETF market cap topped 100 trillion won in June 2023, then crossed 200 trillion won in June 2025 and 300 trillion won in early January this year, before clearing 400 trillion won and 500 trillion won in rapid succession. As of Sunday, total ETF market cap stood at approximately 517 trillion won.
"The domestic ETF market reached 500 trillion won in assets under management just 42 days after crossing the 400 trillion won mark," said Lim Eun-hye, a senior research fellow at Samsung Securities. "The 16 single-stock leveraged ETFs launched on May 27 are continuing to drive additional inflows."
She added that the milestone reflects "the AI-led rally and a broader shift of money into the market," noting that in the week following the launch of the single-stock leveraged ETFs, combined individual net purchases across the 16 products reached 4 trillion won, with trading value hitting 28 trillion won.
th5@heraldcorp.com
