US dollar inverse ETFs top South Korean quarterly returns

In the third quarter, the top three highest-performing exchange-traded funds (ETFs) listed in South Korea were all 'dollar inverse' products that bet on the decline of the US dollar.

According to the Korea Exchange, the KODEX US Dollar Futures Inverse 2X led the rankings with a 22.76% increase. It was followed closely by TIGER US Dollar Futures Inverse 2X at 22.49% and KIWOOM US Dollar Futures Inverse 2X at 22.39%. These 'gobus' (inverse leverage) products are designed to move in the opposite direction of the US dollar futures index by a factor of two.

The high returns were driven by a significant drop in the KRW-USD exchange rate during the period. However, as the US dollar has shown strength again in the fourth quarter due to rising US Treasury yields and interest rate hikes by the Bank of Japan, the upward trend for these inverse products has slowed.