Individual Investors Lose W6.3 Tril. on Single-Stock ETPs... Over-70s Average W30 Mil. Per Account

Individual investors who invested in single-stock exchange-traded products (ETPs and ETNs) suffered more than 6 trillion won in losses in about two and a half months after the products were launched.

While the total loss was largest among those in their 40s, the loss per account was highest among people aged 70 and older, at approximately 30 million won.

According to data submitted by the Financial Supervisory Service to Representative Park Sung-hoon of the ruling People Power Party on the National Policy Committee on October 21, the total losses incurred by retail investors reached 6.313 trillion won from the launch of single-stock leverage ETPs on May 27 through August 14, based on a compilation of data from 10 comprehensive financial investment business entities (Korea, Mirae Asset, NH, Meritz, Samsung, KB, Hana, Kiwoom, Shinhan, and Daishin securities).

The FSS calculated total profit and loss by combining the realized profit and loss of accounts that bought or sold single-stock ETPs at least once during the period with the valuation profit and loss relative to the purchase cost of remaining holdings.

Of the total losses, 2.3242 trillion won occurred during actual trading, while 3.9888 trillion won came from unrealized valuation losses on products still held.

By age group, people in their 40s recorded the largest total loss size.

Those in their 40s lost 2.053 trillion won across 165,200 accounts, followed by those in their 50s with 1.8655 trillion won across 158,000 accounts, and those in their 30s with 1.0912 trillion won across 117,300 accounts.

On the other hand, losses per account were prominent among older demographics.

Investors aged 70 and older recorded 293.4 billion won in losses across 9,800 accounts, translating to an average loss of about 29.94 million won per account.

This is approximately 2.6 times the average loss of about 1.156 million won across all 546,000 accounts.

Those in their 60s also suffered 80.59 billion won in losses across 61,000 accounts, averaging about 13.21 million won per account.

Entering August, trends suggested that investors may have locked in losses by actually selling products they had been holding at a loss.

Trading losses, which stood at 1.9638 trillion won at the end of July, grew by 36.04 billion won over a half-month period to 2.3242 trillion won by August 14.

Conversely, valuation losses from unsold products decreased by 50.7 billion won over the same period, dropping from 4.0395 trillion won to 3.9888 trillion won.

Consequently, total losses expanded by 30.97 billion won from 6.003 trillion won to 6.313 trillion won.

This means that while unrealized losses from held products decreased slightly, losses finalized through actual trading increased by a larger margin, driving up the overall total loss.

Put simply, losses tracked while remaining in the accounts slightly decreased, but losses realized through actual product sales increased.

This is seen as a result of investors taking so-called stop-loss measures by selling directly despite losses, or forced liquidation by securities firms amid credit or margin transactions.

However, the decrease in valuation losses may have been influenced by stock price fluctuations, and additional losses could have occurred from new transactions, meaning that the exact reasons for sales or forced liquidations cannot be confirmed solely through the FSS data.
※ Please note: This article was translated by AI and may contain errors.