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Korea's KOSPI 200 tracker beats every major asset class with an 81% gain this year
KODEX200, which tracks Korea's KOSPI 200, returned 80.76% this year to Sept. 20, about 40 times what big-bank deposits paid. Savers paid that gap for holding cash since January, while Daishin's own analyst puts further upside at about 8.5% and ties it to easing rates and oil.
The Investor · Invest desk
What happened
- The KOSPI 200 fell more than 20% from its peak during July's volatility, and the tracking fund still kept the lead in cumulative returns.
- West Texas Intermediate crude came second, rising 67.36% from $57.41 to $96.08 a barrel over the same period.
- The 272 domestic actively managed equity funds with at least 10 billion won under management returned an average of 58.07%.
- Overseas stocks lagged, with the SPY fund that tracks the S&P 500 up 11.08%.
- Gold fell 2.60%, bitcoin 10.18% and the Korea Ratings bond composite index 3.77% since the start of the year.
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Why it matters
- cost A saver who kept 10 million won in a big-bank deposit earned about 199,000 won against roughly 8.08 million won in KODEX200, giving up about 7.9 million won before fees and tax.
- cost Investors who bought Korea exposure through a stock picker got about 58% where the index fund gave about 81%, a 22.7-point gap, and their management fees still come off the smaller number.
- exposure Measured in dollars the fund gained about 92% because the won rose 4.59%, so foreign holders now carry a currency gain that a weaker won would take back.
Daishin's deposit number is a pro-rated rate. The five banks paid an average base rate of 2.77% a year, with interest accrued daily over 262 days [5], and 2.77% multiplied by 262/365 comes to 1.99% [1]. The fund's number is a price change. One unit of KODEX200 went from 60,460 won on Jan. 2 to 109,285 won on Sept. 20, according to the Daishin Securities report [2]. Both figures are before fees and taxes [6].
An allocator deciding whether to add Korea now is buying at 109,285 won, and the forward case in the same report is modest. "Upward pressure on interest rates has passed its peak, and as oil prices pull back, the burden from rates is also easing," said Lee Kyoung-min, an analyst at Daishin Securities [1]. "If the KOSPI settles in the 6,900 to 7,100 range, it could attempt to break through 7,500 to 7,700," he said [2]. Lee's levels refer to the broader KOSPI. The fund tracks only the 200 largest companies on the main board [1].
From the bottom of his first range to the bottom of the second is a gain of 8.7%, and top to top is 8.5% [2]. He did not give a time frame. Either figure is about three times what a deposit pays in a year at 2.77% [3], and about a tenth of what the fund made this year [7].
If Lee is right, rates and oil ease and chip stocks lead. "Semiconductor and AI sectors are expected to strengthen their leadership on the back of demand and earnings momentum," he said [3]. Oil is the obstacle. WTI was the second-best asset on Daishin's own table [7], and Lee's case needs that runner-up to fall before the leader can climb further [1]. The third outcome is a repeat of July [3]. A buyer at the September price would take that loss while a deposit kept accruing at 2.77% [5].
In my view the 81% measures what an underweight has already cost, and on its own it is a weak argument for buying at the September price. The counter-case is that chip earnings carry the index whether or not oil falls. If the KOSPI clears 7,700 while WTI is still above $90 a barrel, the counter-case is right and the underweight keeps costing money [2][7].
What to watch
- The Korea Ratings bond composite, down 3.77% this year: a recovery would be the first evidence that rate pressure has peaked, as Lee says.
- The won-dollar rate near 1,380.30: a move back toward 1,466.70 would erase most of the extra return dollar-based holders got from the currency.
- Whether Korea's active equity funds narrow their lag to the plain KOSPI 200 fund by year-end.