Korean retail investors in the top 50 most-purchased stocks recorded widespread losses in the first half despite the KOSPI index reaching record highs, according to a Maeil Business analysis of customer account data from a major domestic brokerage firm. Aside from Samsung Electronics and SK Hynix, retail investors suffered losses across nearly all popular stocks. The concentration of gains in a small number of mega-cap companies, combined with FOMO-driven chase buying at peak prices, left the majority of retail participants in loss positions even as headline index performance suggested broad market strength.
Kakao Investors Record 99.9% Loss Ratio in First Half
Kakao (ranked 45th in retail purchase volume) delivered the most severe losses among the top 50 stocks. Retail investors who purchased Kakao during the first half recorded an average return of -52.7%, with 99.9% of investors in loss positions. LG Display and other software and IT stocks excluded from the semiconductor rally saw over 90% of investors remain in loss territory through the end of the first half, despite a brief rebound following NVIDIA CEO Jensen Huang's visit to Korea in June.
SK Square Posts 227% Average Return But 60% Investor Loss Ratio
SK Square, which gained attention as a market leader due to its SK Hynix stake value and expectations for inclusion in semiconductor ETFs, recorded an average retail investor return of 227.2%. However, 59.8% of retail investors held loss positions. The stock surged during the first half before undergoing a sharp price correction of over 30% from its peak. Late-entering retail investors who bought during the brief correction period suffered rapid losses.
Hanwha Aerospace, which led the first-half defense sector rally, posted an average return of 130.1% but a loss ratio of 73.5%. The stock started the year at 940,000 won, surged to 1,537,000 won in April as capital flooded in, then plunged over 33% from its peak to close the month at the 1 million won level. A small number of early-stage investors who entered at the start of the rally captured hundreds of percent in gains, creating an optical illusion in average return figures, while the majority of late-stage investors who entered near peak prices absorbed selling pressure and incurred large-scale losses.
Leveraged ETFs Record Near-Total Investor Losses in June
Indirect investment products were not exempt from the "peak-chasing tragedy." The KODEX SK Hynix Leverage ETF, which ranked first in retail net purchases during June, recorded a loss ratio of 99.7%. The KODEX Samsung Electronics Leverage ETF, which ranked second in net purchases, recorded a loss ratio of 100%.
SK Securities Attributes Concentration to MTS Interface Design
Experts analyzed that the extreme concentration phenomenon that shook the first-half market encouraged retail chase buying. Kim Hak-gyun, head of Shinyoung Securities Research Center, stated that "while capital concentration in specific stocks is a general market characteristic, the recent concentration in the domestic market is quite strong compared to the past." The mobile trading system (MTS) environment also drew persuasive criticism. According to SK Securities analysis, domestic retail investors overwhelmingly decide on investment targets by viewing menus such as "daily top return stocks," "real-time volume surge stocks," and "real-time top search terms" prominently displayed on the first page or main tab when logging into MTS via smartphone. This intuitive information accessibility is interpreted as strongly manifesting herd behavior.
FAQ
What was the loss ratio for Kakao investors in the first half?
According to the Maeil Business analysis of major brokerage data, 99.9% of retail investors who purchased Kakao during the first half were in loss positions, with an average return of -52.7%.
Why did SK Square investors suffer losses despite a 227% average return?
SK Square recorded an average retail return of 227.2%, but 59.8% of investors held loss positions because a small number of early investors captured massive gains while the majority entered near peak prices during a brief correction period, suffering rapid losses as the stock fell over 30% from its high.
