The convergence of derivatives expiry and index rebalancing is increasing market volatility, requiring investors to secure cash and focus on AI-related stocks.
In September, the domestic stock market saw KOSPI retreat by 1.5% to the 6,942 level, and KOSDAQ also fell by 1.6%, with both markets failing to narrow their losses. This downturn was prominent as foreign and institutional investors engaged in net selling in both spot markets. In contrast, individual investors recorded net buying, showing an effort to defend the market.
Especially with increased trading volume and a divergence between spot and futures prices, a tendency for greater volatility towards the market close is evident.
Approaching the year-end, investors who meet large shareholder requirements are more likely to sell some large-cap stocks to avoid taxes. Particularly, top market capitalization stocks like Samsung Electronics and SK Hynix are affected, leading to temporary rebalancing of index-tracking ETFs. This phenomenon is understood as a supply-demand issue occurring at a specific time rather than a long-term trend change.
The rising trend in semiconductor, nuclear power, and construction sectors is closely linked to AI data center construction and related infrastructure investment. These sectors maintain investment appeal and lead the market even amid overall market uncertainty.
Considering the possibility of a shift to a stronger dollar, it is effective to manage funds by combining parking-type ETFs and interest-bearing products. This is considered a strategy to enhance the long-term stability of the portfolio.
In a period of rising domestic interest rates, it is recommended to use interest-bearing products as low-volatility defenders to secure portfolio stability. Simultaneously, dollar assets should be set as attackers to target exchange rate gains and interest income, diversifying investments into US MMFs and short-term bonds. Specifically, a strategy of progressively buying dollars in the 1,330 to 1,380 won range is analyzed to be effective for gradual asset growth.
When selecting a parking-type ETF for short-term fund management, four key indicators must be checked. First, duration refers to the maturity period; shorter duration means less volatility and greater stability. Second, YTM (Yield to Maturity) fluctuates daily, so continuous monitoring is crucial. Third, AUM (Assets Under Management) is a criterion for judging liquidity; larger AUM facilitates redemption. Finally, the expense ratio determines cost efficiency, so selecting a low expense ratio is generally preferred.
Hedged products have the disadvantage of higher expenses due to additional hedging and rollover costs. Therefore, selecting a hedged type from a long-term perspective can be inefficient. On the other hand, hedged types are suitable for short-term portfolio management, such as for corporate entities. If the premise is that the dollar will strengthen, a strategy of accumulating assets from a long-term perspective with an unhedged type is more advantageous.
September is seasonally a challenging period for the US stock market, and various external factors suggest it's not an opportune time for aggressive buying. Therefore, a strategy of depositing funds into parking-type products and waiting is necessary. It is emphasized that a strategy of deploying secured cash to generate profits when the AI momentum reactivates is crucial.
As the KRX Semiconductor Index undergoes rebalancing, the number of constituent stocks will be significantly reduced from 35-36 to around 20. Stocks excluded from the index will inevitably see selling pressure from index-tracking ETFs. Conversely, some semiconductor equipment stocks can expect buying effects as their weight in the index increases.
The semiconductor index applies a cap that limits the weight of a specific stock to 20%. In the process of lowering this cap, large-cap stocks with high weightings, such as Samsung Electronics and SK Hynix, experience forced passive selling. The funds from this selling are then diversified into stocks with lower weightings in the index, such as semiconductor equipment stocks, leading to buying effects.
Due to the impact of simultaneous expiry dates and index rebalancing, market volatility is expected to increase significantly towards the market close. On such 'event-driven' trading days, novice investors are at higher risk of losses, so it is advisable to refrain from trading as much as possible and adopt a conservative strategy of observing market conditions.
Consequently, AI-related stocks in the US market are likely to see increased differentiation among companies rather than all rising together. This volatile market trend is expected to continue in the second half of this year, emphasizing the importance of holding cash and adapting to market changes.
The first company to consider in an AI investment strategy is Nvidia. It is crucial to primarily analyze Nvidia's earnings and the companies in its value chain. Additionally, one should examine the competitive landscape between Nvidia's GPUs (Graphics Processing Units) and Google's TPUs (Tensor Processing Units), and continuously monitor trends of various AI model development companies such as OpenAI, Anthropic, Meta, and Grok to seek investment opportunities. Through this analysis, investors can identify the core drivers of the AI market and select promising companies.
Creditworthiness is the most important factor in bond investment. In the case of short-term bond ETFs, a high interest rate does not necessarily mean it is a good product. It is crucial to consider that higher interest rates typically imply greater credit risk, or default risk, of the bond. Therefore, one must carefully review the creditworthiness of the issuer rather than solely chasing high returns.
When comparing cash-type ETFs, it is essential to meticulously compare returns across different periods, such as 1-month, 3-month, 6-month, and 12-month. Furthermore, it is important to carefully check if bid and ask prices are tightly formed during buying and selling, meaning a narrow bid-ask spread. Checking these factors is advisable for selecting a highly liquid and efficient cash-type ETF.
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