Investor funds shifted into parking-type and dividend-type exchange-traded funds (ETFs) this month as uncertainty in the domestic stock market intensified. Analysts attribute the trend to rising demand for products that can defend against volatility while paying interest even for a single day of investment.
According to Koscom's ETF CHECK on the 26th, parking-type ETFs tracking ultra-short-term rates, money markets, and certificate of deposit (CD) rates topped the list of fund inflows last week. Notable examples include TIGER KOFR Rate Active (Synthetic), with 108 billion won, and TIGER Money Market Active, with 104.4 billion won. Seven cash-like and short-term bond products drew a total of 422.9 billion won over five days. Products tracking KOFR, CD rates, and financial bonds are classified as "parking-type" because they offer higher expected returns than deposits with a low investment risk grade.
Dividend-type ETFs also attracted investment. Four products—covered-call products that invest in dividend stocks while selling call options to secure premiums, and U.S. dividend stock ETFs—drew a total of 301 billion won. TIGER Dividend Covered Call Active received 105.2 billion won, while KODEX 200 Covered Call Active alone drew 95 billion won. The trend is interpreted as reflecting a growing number of investors seeking to secure both the stability of parking-type products and the cash flow of dividend-type products. The combined inflow into 11 products across the two types reached 723.9 billion won.
As domestic stock market volatility increased, investors appear to have viewed parking-type and dividend-type products as short-term shelters. The KOSPI index plunged 21.07 percent from 8,476.48 at the end of June to 6,690.62 on the 24th of this month. Short-term standby funds from investors fatigued by stock market uncertainty concentrated in these products. TIGER KOFR Rate Active (Synthetic), up 0.04 percent, and TIGER Dividend Covered Call Active, up 4.73 percent, rose slightly when the KOSPI index fell, drawing investment demand.
Experts forecast that the shift of funds into parking-type and dividend-type ETFs will continue as the volatile market persists for the time being. However, some observers say the flight from risk assets could ease if U.S. Big Tech earnings at the end of this month confirm artificial intelligence (AI) capital expenditure and funding capacity. "If Big Tech's second-quarter earnings meet or exceed expectations, it would be worth taking a phased-buying approach to leading stocks in the post-correction phase," said Noh Dong-gil, a researcher at Shinhan Investment.
