As domestic and global equity markets swung sharply, ETFs investing in gold and SK Hynix swept the top of the return rankings in South Korea’s ETF market. Gold mining ETFs in particular surged nearly 12% in just four trading days, drawing investor attention. On the flip side, defense, secondary battery, and KOSDAQ leveraged products posted a string of double-digit losses, creating a stark divide in outcomes depending on the investment target.
According to the Korea Exchange on August 23, among South Korea-listed ETFs from August 18 to 21, “HANARO Global Gold Mining Companies” rose 11.94% to rank first in overall returns. “ACE Gold Futures Leverage (Synthetic H)” climbed 9.12% to take second place.
Rising Gold Prices Translate into Improved Mining Company Earnings
The rally reflects investment demand spreading to mining companies, which benefit disproportionately from higher gold prices through improved earnings. Long-term interest rates have been climbing recently on fiscal soundness concerns in major economies, yet the dollar has actually weakened. While rising rates typically pressure gold prices, analysts note that the current dynamic is different because fiscal anxiety—rather than economic recovery—is driving the high-rate environment.
Ko Kyung-bum, an analyst at Yuanta Securities, said: “Ultimately, what determines gold’s direction is not the level of interest rates but the reason behind their rise. With long-term rates rising simultaneously in the U.S., Japan, Germany, and France, declining confidence in the dollar stemming from fiscal instability could lead to higher gold prices.”
Within the gold complex, mining companies are expected to show greater upside momentum. Gold miners have a high proportion of fixed costs, meaning profit margins improve rapidly when gold prices rise. In the first quarter of this year, total sustaining costs rose 16.2% year-over-year, while gold prices jumped 49.4%. As a result, GDX—the global gold mining ETF—returned 36.5% over the past month, far outpacing the 12.3% return of GLD, the physical gold ETF.
| Metric | Value |
|---|---|
| Q1 total sustaining cost increase | 16.2% |
| Gold price increase | 49.4% |
| GDX one-month return | 36.5% |
| GLD one-month return | 12.3% |
Note: GDX refers to the global gold mining ETF; GLD refers to the physical gold ETF.
However, volatility may persist in any further upside. Oh Jae-young, an analyst at KB Securities, cautioned: “Uncertainty surrounding a potential U.S.-Iran conflict and the associated Federal Reserve tightening concerns make it difficult to expect a sustained uptrend.” That said, he added: “If tightening concerns gradually ease within the year, gold prices could see additional rebounds from current levels.”
SK Hynix Leveraged Products Rally; Defense and Secondary Batteries Plunge
Following gold, SK Hynix was the next standout. “KODEX SK Hynix Single Stock Leverage” rose 8.69% over the same period, with “KIWOOM SK Hynix Futures Single Stock Leverage” up 8.67%, “SOL SK Hynix Single Stock Leverage” up 8.41%, “1Q SK Hynix Futures Single Stock Leverage” up 8.26%, and “TIGER SK Hynix Single Stock Leverage” up 8.23%—a parade of related products filling the top of the return rankings.
On the opposite end, losses mounted, concentrated in leveraged products. “PLUS K-Defense Leverage” fell 19.97% over the four-day stretch, the steepest decline, followed by “KODEX Defense TOP10 Leverage” (-19.61%) and “SOL Shipbuilding TOP3 Plus Leverage” (-19.46%). “SOL SK Hynix Futures Single Stock Inverse 2X,” which bets against SK Hynix, also dropped 16.90%. “KODEX Secondary Battery Industry Leverage” (-15.20%) and “KODEX KOSDAQ 150 Leverage” (-13.69%) also posted double-digit declines.
| Category | ETF | 4-Day Return |
|---|---|---|
| Top | HANARO Global Gold Mining Companies | +11.94% |
| Top | ACE Gold Futures Leverage (Synthetic H) | +9.12% |
| Top | KODEX SK Hynix Single Stock Leverage | +8.69% |
| Bottom | PLUS K-Defense Leverage | -19.97% |
| Bottom | KODEX Defense TOP10 Leverage | -19.61% |
| Bottom | SOL Shipbuilding TOP3 Plus Leverage | -19.46% |
Note: Returns are based on the four trading days from August 18 to 21.
This week’s ETF market flows reflect concentrated short-term capital rotation driven by shifts in the macro environment. Gold mining ETFs benefited most as gold prices gained momentum from structural fiscal concerns, while strength in SK Hynix—a bellwether semiconductor stock—lifted leveraged product returns. Meanwhile, profit-taking appears to have intensified in defense, shipbuilding, and secondary battery sectors that had been on extended rallies, amplifying losses in leveraged products.