Kospi's Worst Month in History Contrasted by Strong ETF Performance

The Korean stock market suffered its worst month in July, with the Kospi plummeting over 20% as investors fled to safe-haven assets. However, some exchange-traded funds (ETFs) bucked the trend and delivered strong returns.

RISE 200 High-Dividend Covered Call ATM was the top-performing ETF, gaining 18.15%, as growing investor attention to dividend-paying shares drove its outperformance. Analysts attributed the advance to rising expectations for dividends and shareholder returns from the banking sector.

Crude oil-linked ETFs also fared well, with KODEX WTI Crude Oil Futures and TIGER Crude Oil Futures Enhanced (H) returning 17.57% and 16.99%, respectively. This was due to renewed tensions between the United States and Iran, as well as growing fears of supply disruptions from a potential closure of the Strait of Hormuz.

China-focused ETFs also delivered strong results, with RISE China HSCEI (H) returning 13.83% and RISE China MSCI China (H) returning 9.30%. This was attributed to rising expectations for Chinese AI and technology stocks, as China's push to build its own AI model, semiconductor, and data center ecosystem stimulated investor sentiment.