Investors Pile ₩2.6 Trillion Into Money-Market and Covered-Call ETFs Amid Stock Market Correction — BigGo Finance

As South Korea’s stock market enters a correction phase, investors are increasingly pulling funds out of equities and redirecting them into money-market and covered-call ETFs. Demand for securing cash flow even in a declining market is driving capital into both product categories simultaneously.

According to data compiled by ETF Check on the 29th, KODEX Money Market Active attracted the most capital over the past week. This single ETF saw net inflows of ₩531.9 billion (approximately $386.6 million). Money Market Active is a cash-parking product that invests idle funds left in brokerage accounts into ultra-short-term bonds and commercial paper (CP) to generate interest income. While its annual yield is below 3%, it can be traded in real time like stocks and has minimal price volatility, making it suitable for temporarily parking funds.

During the same period, TIGER Money Market Active also attracted ₩303.6 billion (approximately $220.7 million). Combined, these two products alone drew over ₩800 billion (approximately $581.5 million). With RISE Money Market Active pulling in an additional ₩121.9 billion (approximately $88.6 million), total inflows into domestically listed money-market ETFs reached ₩1.6 trillion (approximately $1.16 billion) in a single week. The surge reflects investor sentiment favoring temporary yet stable management of standby funds amid growing stock market uncertainty.

Covered-call ETFs—which hold stocks while selling call options to capture option premiums as income—also continued to see inflows. TIGER Dividend Covered Call Active led with ₩341.3 billion (approximately $248.1 million), followed by KODEX 200 Covered Call Active with ₩251.4 billion (approximately $182.8 million). TIGER US Nasdaq 100 Target Daily Covered Call recorded ₩151.1 billion (approximately $109.9 million), meaning three of the top ten products by inflows were covered-call ETFs. In total, major South Korean covered-call ETFs attracted approximately ₩1 trillion (approximately $726.9 million) over the week.

Covered-call products tend to gain popularity when the stock market shows sluggish momentum. The premiums received from selling call options act as a buffer during price declines, providing downside protection, while also offering the prospect of monthly dividend income.

While inflows into South Korean equity ETFs have slowed, money continues to flow steadily into US equity ETFs. TIGER US Nasdaq 100 attracted ₩262.9 billion (approximately $191.1 million) and TIGER US S&P 500 drew ₩219.6 billion (approximately $159.6 million). KODEX US Nasdaq 100 saw ₩186.1 billion (approximately $135.3 million) in inflows, and when combined with the aforementioned TIGER US Nasdaq 100 Target Daily Covered Call, these four products alone attracted over ₩800 billion (approximately $581.5 million).

Retail investor net buying patterns point in the same direction. Among the top ETFs by retail net purchases over the past week, TIGER US S&P 500 ranked first with ₩154.3 billion (approximately $112.2 million), with six US equity ETFs making the list. Covered-call ETFs also featured prominently, with TIGER Dividend Covered Call Active ranking second at ₩124.5 billion (approximately $90.5 million), and three covered-call products placing in the top ten. KODEX Money Market Active also made the list at seventh place with ₩41.5 billion (approximately $30.2 million).

From the 24th through the 28th, retail investors net purchased ₩499.8 billion (approximately $363.4 million) worth of ETFs on the KOSPI market, while foreign investors bought ₩269.7 billion (approximately $196.1 million).