By Lee Hyo-sik
Staff Reporter
Individual investors have taken money out of equity funds over the past year as the stock markets at home and abroad have recovered to some extent from the global financial crisis.
After years of agony and sleepless nights over money-losing funds, many retail investors decided to take matters into their own hands, investing directly into stocks to realize better returns.
But things have not turned out as they had hoped. Individuals have unfortunately been losing on the ongoing market rallies, lagging behind institutional and foreign investors in performance, according to the Korea Exchange (KRX) Thursday.
In March, the average return of the top 30 stocks sold by individuals last month came to 11.05 percent, beating the benchmark KOSPI's 5.26-percent return. They sold these 30 shares worth 4.4 trillion won, but all of them posted positive returns. In particular, shares of LG Innotek rose 25.9 percent, followed by Hynix at 23.1 percent and Woori Financial Group at 22.2 percent.
A KRX official said retail investors did not take full advantage of market rallies last month by prematurely cashing out equity investments, thinking the market would head downward again.
In contrast, the top 30 stocks bought by individuals fell 1.04 percent on average. They net purchased Hyosung shares worth 44.2 billion won, but its price fell 8.32 percent. Shares of Hankook Tire also dropped 7.32 percent in March, followed by Hyundai Insurance at 6.87 percent and Hanhwa Petrochemical at 7.26 percent.
Retail investors also heavily invested in Korea Life Insurance, buying the newly listed shares worth 150.5 billion won. But the share still fell 0.22 percent.
In particular, they put 10.2 billion won into Tongyang Securities Value SPAC in March. But its price plunged 17.64 percent.
Many individuals have purchased shares of special-purpose acquisition companies (SPACs) listed on either the KOSPI or the Kosdaq to ride on the merger and acquisition (M&A) fever and make quick profits. SPACs invest in the stock market and then use the money gained to takeover small, promising companies.