Young investors left behind in the KOSPI 5,000 era bet on 2x leveraged ETFs

KOSPI ‘Top 10’ weight tops 50%

Two semiconductor heavyweights drive the index

‘Large-cap focused’ investors in their 60s and 70s rank No. 1 in returns

In South Korea’s stock market, the combined weight of the top 10 companies by market capitalization has climbed above 50%, as the “large-cap dominance” led by Samsung Electronics and SK hynix has intensified.

According to the Korea Exchange on the 18th, the top 10 by market cap accounted for 51.69% of the KOSPI market as of the 13th, up 10.27 percentage points from a year earlier. Over the same period, the combined share of the top two—often dubbed the “semiconductor duo,” which ranks No. 1 and No. 2 by market cap—jumped from 22.91% to 37.63%, deepening concentration. The weight of the electrical and electronics sector, which includes semiconductors, also rose from 34.81% to 47.81%. By contrast, other financials (11.62%→11.54%) and transportation equipment and parts (11.16%→10.10%) showed little change. Given that the KOSPI more than doubled from 2,500 to 5,500 during the period, semiconductor outperformance stands out.

The gap in investor returns has also widened. According to NH Investment & Securities, the top performers in domestic equities this year were investors holding at least 500 million won in financial assets. They posted returns of more than 18% last month. The lowest returns came from those with financial assets of at least 5 million won but less than 20 million won (14.43%). Returns and asset size are moving in opposite directions. By age, investors aged 60 and above recorded the highest returns (17.39%), while those in their 20s posted the lowest (10.98%).

As the KOSPI 5,000 era begins, “fear of missing out” has intensified. Young investors who feel sidelined in the rally are rushing into the leveraged exchange-traded fund (ETF) market. According to the Korea Financial Investment Association, 167,281 people completed mandatory pre-education for leveraged exchange-traded products (ETPs) in January this year—equivalent to 81% of last year’s total. This year, funds flowing into the 'KODEX KOSDAQ150 Leveraged' and the 'KODEX 200 Futures Inverse 2X' ETFs reached 1.6 trillion won and 750 billion won, respectively. More than 2 trillion won poured in over a month into products designed to maximize returns in both rising and falling markets. Lee Ui-kyung, a professor of business administration at Daejin University, said, “The recent surge is an exceptional market that Korean investors have never experienced in their lifetime,” adding, “Some young people in their 20s and 30s are becoming absorbed in leveraged products to maximize short-term gains.”

By Cho Ara rrang123@hankyung.com