South Korean ETFs Rise with Dollar Weakness

The top-performing ETFs in South Korea during Q3 were all 'dollar inverse 2X' products, which bet on a decline in the dollar's value.

These high-risk instruments track the daily movement of the US Dollar Futures Index at negative two times leverage, generating double gains when the dollar falls and double losses when it rises.

In Q3, the won/dollar exchange rate plunged from 1,500-won to 1,350-won, with the KODEX US Dollar Futures Inverse 2X posting a 22.76% return, followed by TIGER US Dollar Futures Inverse 2X at 22.49%, and KIWOOM US Dollar Futures Inverse 2X at 22.39%.

However, since mid-September, the dollar has rebounded due to high oil prices, rising US Treasury yields, and the Bank of Japan's benchmark rate hike.

Jung Yong-taek, an analyst at IBK Investment & Securities, expects downward pressure on the won to prevail for now, driven by external instability.