Net buying of US stocks by Korean retail investors, known as "seohak ants," surged sharply this month, data showed. With the domestic stock market recently mired in a downturn and heightened volatility, some interpret the shift as retail investors once again beginning to leave the local market in earnest. These investors concentrated their purchases on leveraged exchange-traded funds (ETFs) that track a set multiple of the daily returns of underlying assets on the US market.
According to Seibro, the securities information portal of the Korea Securities Depository, Korean investors' net buying of US stocks totaled $2.59602 billion (about 3.7982 trillion won) from the 1st to the 24th of this month, four times the level of last month ($632.96 million). Seohak ants net bought $1.6915 billion worth of US stocks in March this year, then turned to net selling of $468.93 million in April. Net selling grew to $939.77 million in May, before shifting to a net buying advantage of $632.96 million last month, and this month the net buying scale expanded. In line with volatility in the domestic stock market, retail investors' exodus from the local market is becoming active again.
Seohak ants' buying was concentrated in semiconductor stocks. The top net buying settlement from the 1st to the 24th was the "Direxion Daily Semiconductor Bull 3X ETF," which tracks three times the daily returns of the US Philadelphia Semiconductor Index (net buying of $1.30532 billion). It was followed by SK hynix American Depositary Receipts (ADRs) ($675.55 million) and the "Direxion Daily MSCI South Korea Bull 3X ETF," which tracks three times the performance of the Korean stock market ($213.12 million). In fourth place was the "ProShares Ultra QQQ ETF," which tracks twice the Nasdaq index. Demand was so concentrated in high-risk products that leveraged ETFs tracking two to three times the daily returns of underlying assets accounted for three of the top five net-bought stocks.
As retail investors again turn their attention to overseas markets, funds are also flowing into US market-tracking ETFs listed in Korea. According to Koscom's ETF CHECK, three of the five products with the largest net fund inflows last week were US index-tracking ETFs. "TIGER US S&P500" saw the largest net inflow at 221.4 billion won, while "TIGER US Nasdaq100" (143.9 billion won) and "KODEX US S&P500" (139.2 billion won) ranked third and fourth.
