As the KOSPI has continued its steady climb toward the 5,000 mark since the start of the year, books related to financial investment have also been gaining popularity. The photo shows visitors browsing investment-related titles at the economics and stock investment section of the Kyobo Bookstore in Gwanghwamun, Jongno District, Seoul. (Yonhap)
SEOUL, Jan. 21 (Korea Bizwire) — South Korea’s unexpectedly strong start to the year is beginning to reshape investor sentiment, as retail traders scale back bets on a market downturn and shift cautiously toward products that track the rise of the benchmark index.
Data released Wednesday by Yonhap Infomax showed that individual investors last week reduced purchases of inverse exchange-traded funds, which are designed to profit from falling stock prices, after the KOSPI extended its rally longer than many had anticipated.
Between Jan. 12 and 16, retail investors made their largest net purchases in KODEX 200, an exchange-traded fund that tracks the KOSPI 200 index, investing about 178.9 billion won. Demand was comparable to buying in a U.S. market tracker, the TIGER S&P 500 ETF.
Inverse products remained in demand but at a diminished scale. Purchases of KODEX 200 Futures Inverse 2X totaled about 109.1 billion won, ranking fourth among retail ETF inflows — a sharp contrast from the previous week, when bearish funds dominated individual investors’ portfolios.
A financial data screen in the dealing room of Hana Bank in Seoul on Jan. 21, 2026, shows the benchmark Korea Composite Stock Price Index having risen 24.18 points, or 0.49 percent, to close at 4,909.93. Seoul shares closed higher as investors hunted for bargains amid looming market volatility sparked by U.S. President Donald Trump’s push to take control of Greenland. (Yonhap)
Just one week earlier, from Jan. 5 to 9, retail traders had heavily favored inverse and defensive strategies, anticipating a market pullback after the KOSPI’s rapid ascent. At that time, inverse ETFs ranked among the most actively bought products, while index-tracking funds drew limited interest.
Foreign investors have shown a similar shift. After favoring inverse ETFs earlier in the month, overseas investors last week redirected their purchases toward funds that benefit from rising domestic stock prices, including KOSPI and KOSDAQ index trackers. Inverse products largely disappeared from their top investment choices.
Institutional investors, meanwhile, have remained consistent. Since the start of the year, pension funds and other institutions have steadily accumulated leveraged and index-tracking ETFs tied to gains in both the KOSPI and KOSDAQ, signaling continued confidence in the broader market trend.
The shift in sentiment comes as the KOSPI, which had climbed without interruption since the first trading day of the year, posted its first decline in 13 sessions on Monday, closing at 4,885.75.
Still, analysts said the gradual retreat from aggressive bearish positioning suggests that investors are increasingly willing to accept the rally’s durability — at least for now — even as volatility remains a defining feature of the early 2026 market.
Ashley Song (ashley@koreabizwire.com)
