FnGuide financial information services announced that 45 Inverse ETFs with over 1 billion won in assets yielded average returns of 13.21 percent this year. (image: Korea Bizwire)
SEOUL, Oct. 19 (Korea Bizwire) — With the South Korean stock market experiencing a heavy correction due to the U.S-China trade war and financial instability among emerging states, Inverse Exchange Traded Funds (ETF) are yielding high profits.
FnGuide financial information services announced that 45 Inverse ETFs with over 1 billion won in assets yielded average returns of 13.21 percent this year.
Inverse ETFs are designed to yield profits when a stock index drops. As of Tuesday, the KOSPI had dropped by 13.06 percent this year, while the KOSDAQ plunged by 8.3 percent.
Consequently, the average rate of return of all South Korean equity funds was a record low of -15.07 percent this year, and -8.78 percent each month.
Inverse ETFs, however, yielded high rates of return each month, reaching as high as 7.31 percent last month.
The South Korean stock market experienced what was dubbed ‘Black Thursday’ on October 11 when the KOSPI plunged by 4.44 percent, the steepest daily drop in seven years.
Kim Dae-jun, a researcher at Korea Investment & Securities, said that stock markets in South Korea and other emerging states were unlikely to recover unless uncertainty improved, adding that “there are currently no signs of recovery due to anxiety prevalent in the market.”
H. M. Kang (hmkang@koreabizwire.com)
