Korean retail investors sold off individual semiconductor stocks including Micron and Nvidia in early September while snapping up SOXL, an exchange-traded fund that delivers three times the daily return of a chip index.
Micron, Marvell Among Heaviest Sales
Data from the Korea Securities Depository's securities information portal showed that Korean retail investors unloaded large amounts of individual chip stocks between the 1st and the 4th of September, based on the query date.
Micron saw net selling of more than $100 million, or about 134.8 billion won, the heaviest concentration of selling among chip names during the period. Investors sold $68.61 million worth of Sandisk, a NAND flash memory maker, and $49.37 million worth of Marvell Technology, which makes networking and communications chips for data centers.
Nvidia, the world's most valuable company by market capitalization, saw net selling of $15.56 million. Investors also sold $46.16 million, or about 62.2 billion won, worth of SK hynix American depositary receipts. The reversal stands out because SK hynix ADRs had drawn steady buying of $810.97 million, or about 193.8 billion won, from their New York listing in July through the end of August.
SOXL Buying Accelerates Instead
In contrast to the selling of individual chip stocks, Korean retail investors again bought heavily into the three-times leveraged ETF SOXL over the same period. The fund tracks three times the return of the Philadelphia Semiconductor Index, and net buying reached $430.95 million over the four days from the 1st to the 4th of September.
As of the end of August, Korean retail investors' SOXL holdings were valued at $5.23 billion. That marks a shift from the two sessions on August 28 and August 31, when they liquidated $752.44 million worth of the fund, before turning to net buying in September.
The pattern of selling individual names while buying the leveraged product is read as a strategy to avoid single-stock risk while maximizing short-term returns from the chip sector as a whole.
A recent surge in chip share prices has raised so-called peak-out concerns that earnings have topped out. That has prompted the interpretation that investors are locking in some gains on individual stocks while continuing to bet on the long-term growth of the artificial intelligence and semiconductor industries.
Korean retail investors also spread their buying across a range of other assets in September. They bought $94.92 million worth of SGOV, the iShares 0-3 Month Treasury Bond ETF, which invests in U.S. Treasury bills maturing in three months or less, and $47.28 million worth of IonQ, a quantum computing stock that ranked third among net purchases.
They also bought $39.88 million worth of JEPQ, the JPMorgan Nasdaq Equity Premium Income ETF, which pays monthly distributions based on Nasdaq-listed holdings, and $36.65 million worth of U.S. drugmaker Merck. Those two ranked fourth and sixth among net purchases, respectively.
