A nauseating July for stocks — top ETFs were high-dividend, crude oil and China plays

Amid a Kospi decline of more than 20% in July, exchange-traded funds tied to high-dividend stocks, raw materials and China-related assets posted relatively strong returns for the month.

Excluding leveraged and inverse products, the top-performing ETF in July was the RISE 200 High-Dividend Covered Call ATM, which returned 18.15%, according to ETF Check and Yonhap.

The product invests in domestic high-dividend stocks while simultaneously selling call options to generate monthly cash income. Growing investor attention to dividend-paying shares during the market downturn drove its outperformance.

KODEX Bank and TIGER Bank ETFs, both focused on domestic banking stocks, also posted strong gains — returning 7.03% and 6.97%, ranking eighth and ninth, respectively. Analysts attributed the advance to rising expectations for dividends and shareholder returns from the banking sector.

Crude oil-linked ETFs also featured prominently in the top rankings. Renewed tensions between the United States and Iran, along with growing fears of supply disruptions from a potential closure of the Strait of Hormuz, pushed oil prices higher.

KODEX WTI Crude Oil Futures and TIGER Crude Oil Futures Enhanced (H) returned 17.57% and 16.99%, respectively. RISE US S&P Oil Producers (Synthetic H) ranked fifth with a return of 10.51%.

China-focused ETFs also delivered strong results. RISE China HSCEI (H), which invests in leading large-cap Chinese companies listed on the Hong Kong stock exchange, returned 13.83%, while RISE China MSCI China (H), which invests more broadly in Chinese companies, returned 9.30% — ranking fourth and sixth, respectively. TIGER China Hang Seng 30 (6.37%), which spreads investments across 30 blue-chip Chinese companies listed on the Hong Kong Stock Exchange, rounded out the top 10.

The gains reflected rising expectations for Chinese AI and technology stocks. Analysts said China's push to build its own AI model, semiconductor and data center ecosystem — independent of US AI technology — has been stimulating investor sentiment.

Over the past week, overseas equity ETFs dominated the rankings. PLUS US AI Agent (8.80%), which concentrates its holdings in 10 AI agent-related companies listed on US exchanges, posted the best return of the period.

TIGER Global Cloud Computing INDXX (7.66%), which invests in global computing companies, and SOL US AI Software (5.36%) ranked second and fourth, respectively. RISE Palladium Futures (H) (5.51%), which tracks palladium prices, came in third.

The domestic ETF market's total net assets stood at 512 trillion won ($355 billion) at the end of June. As the Kospi fell more than 20% through the month, that figure shrank to 398 trillion won by Thursday — a decline of 114 trillion won. After the Kospi posted an unprecedented surge on Friday, total net assets were estimated to have recovered to nearly 440 trillion won by the close of that day.