South Korean retail investors in U.S. stocks sold off large-cap chip names such as Nvidia and Micron Technology this month while aggressively buying exchange-traded funds tracking the semiconductor sector.
Korean investors sold a net $100 million (about 134.6 billion won) worth of Micron Technology, the U.S. memory chipmaker, between the 1st and the 4th of this month, according to the Korea Securities Depository on the 6th. They also net sold SanDisk ($68.61 million) and Marvell Technology ($49.37 million), along with $15.56 million worth of Nvidia, the world's most valuable company by market capitalization.
American depositary receipts of SK hynix also swung to net selling this month. Korean investors had net bought $810.97 million worth of SK hynix ADRs from their New York listing in July through the end of last month, but sold a net $46.16 million this month.
Buying of ETFs tracking semiconductor indexes continued, however. A prime example is the Direxion Daily Semiconductor Bull 3X Shares (SOXL), a leveraged ETF that seeks three times the daily return of the Philadelphia Semiconductor Index. Korean investors held $5.23172 billion worth of SOXL as of the end of last month and bought an additional $430.95 million this month.
The strategy reflects a calculation that investors can lock in gains on chip stocks that have surged in a short period while retaining exposure to the sector's growth. It is read as a move to avoid the risk of individual semiconductor names while staying invested in the expansion of artificial intelligence and the chip industry.
