At the beginning of this year, the money market (MM) exchange-traded fund (ETF), which was gaining attention as a safe investment during a volatile market, has recently seen a rapid outflow of funds. With the domestic stock market showing a rally, it is interpreted that the judgment that simply following the market index could yield higher performance than MM has come into play.
According to the 27th KOSCOM ETF check, in the past week (June 19 to June 25), the ETFs with the largest net outflows were the 'KODEX Money Market Active' ETF and the 'RISE Money Market Active' ETF, placing first and second respectively. A total of 474 billion won and 139 billion won was withdrawn from the two products.
The money market ETF invests in low-risk, ultra-short-term financial products to generate stable revenue and serves as a temporary holding of funds. While offering higher interest rates than deposits, it can be traded in real time, making it highly popular as a short-term investment during the period of significant market volatility in the first half of this year.
However, this month, as the stock market has significantly risen, funds that were in the money market ETF are being rapidly converted to cash. This reflects a shift in behavior towards seeking excess revenue by investing directly in the market rather than pursuing the stable yields typical of deposits.
According to the Korea Exchange, as of the 25th, the trading amount in the domestic stock market was recorded at 43 trillion won. It is the first time in about 1 year and 11 months that the trading amount has surpassed 40 trillion won since July 2023 (40.1005 billion won).
Kim Dong-won, head of research at KB Securities, said, 'While it is necessary to keep short-term risks in mind, from a long-term perspective, a continued bullish market due to a re-evaluation of valuations and a breakthrough of historical highs is anticipated.'
While funds are flowing out of the stable investment option, money market funds, the stock market waiting funds are rapidly increasing. According to the Korea Financial Investment Association, investor deposits have risen from the 50 trillion won range last month to the 60 trillion won range this month. As of the 24th of this month, it recorded 66.4114 trillion won, marking the highest level in three years.
Investor deposits are the waiting funds that investors have placed in securities accounts to purchase stocks. The higher the deposits, the more it is interpreted as a signal that more funds will flow into the stock market in the future.
Lee Kyung-soo, a researcher at Hana Securities, noted, 'The recent surge in customer deposits continues,' and added, 'In past cases, when last week's deposits increased, it tends to lead to net buying by individuals in that week.' He explained that 'when deposits increase by 1 trillion won, a typical net buying pattern of about 200 billion won is confirmed,' indicating that a potential buying momentum from retail funds is accumulating.
During this month (June 2 to 24), the domestic stock market's rise rate was 12.5%, the highest among major global stock markets (G20).
Meanwhile, some voices have noted that the KOSPI has entered a short-term overheating phase. The KOSPI surged about 35% in two and a half months since the low point (2,328 points) on April 9, when it plummeted due to tariffs imposed by Trump.
Lee Eun-taek, a researcher at KB Securities, said, 'The KOSPI's super bullish trend continues and it has entered an overheating phase,' and added, 'Currently, with about ten days left until the 'tariff 90-day exemption' deadline, there is a possibility of adjustments due to the resumption of tariff threats.' He further predicted, 'The period after the U.S. confirms economic stimulus measures such as interest rate cuts or tax cuts in July and August could be a risky time.'