South Korean investors bought far more short-term Treasury, dividend and benchmark index exchange-traded funds than individual U.S. stocks over the past month. ETFs accounted for six of the 10 most heavily net-bought overseas securities, and U.S. benchmark index products also dominated retail net buying in the domestic ETF market.
The most heavily net-bought overseas security over the past month was the iShares 0-3 Month Treasury Bond ETF (SGOV), according to the Korea Securities Depository on the 22nd. Net purchases reached $246.59 million, or about 340.3 billion won. SGOV invests in U.S. Treasurys maturing in three months or less, leaving its price relatively less sensitive to interest rate moves. It pays monthly distributions and is used as a vehicle for parking dollar cash.
The Schwab U.S. Dividend Equity ETF (SCHD), which holds 100 U.S. dividend-paying stocks, ranked second at $212.51 million, or about 293.3 billion won. SCHD screens companies that have paid dividends for a set period, weighing cash flow, return on equity and dividend growth.
The Vanguard S&P 500 ETF (VOO), which tracks the Standard & Poor's 500 index, came third at $199.17 million, or about 274.9 billion won. Alphabet, Google's parent, ranked fourth at $170.31 million, or about 235 billion won, followed by the Invesco QQQ ETF (QQQ), which tracks the Nasdaq 100, at $142.93 million, or about 197.2 billion won.
Other ETFs in the top 10 included the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), which holds Nasdaq 100 constituents while seeking monthly distributions, and the ProShares Ultra QQQ ETF (QLD), which tracks twice the daily return of the Nasdaq 100 — six ETFs in all. A month earlier, growth stocks and higher-risk products topped the ranking, including SOXL, a leveraged ETF tracking three times the daily return of a U.S. semiconductor index, along with Alphabet and SpaceX. "The recent shift toward ETFs reflects growing demand to invest more steadily by spreading assets, rather than trading around the short-term moves of a single stock," an industry official said. "It can be read as a move to build portfolios matched to investment goals and risk levels by combining ETFs with different characteristics."
A similar pattern emerged in the domestic ETF market as the KOSPI remained stuck in a trading range. Four of the five most heavily net-bought products by retail investors over the same period were U.S. benchmark index ETFs. TIGER U.S. S&P500 ranked first at 465.7 billion won, while KODEX U.S. Nasdaq100 and KODEX U.S. S&P500 drew 273 billion won and 260.5 billion won, respectively. TIGER U.S. Nasdaq100 ranked fourth with net purchases of 179.2 billion won. "Rather than trying to predict market direction in the short term, a strategy of diversifying through benchmark indexes such as the S&P 500 and Nasdaq 100 to capture long-term growth opportunities can be effective," an official at Mirae Asset Global Investments said.
Meanwhile, the broader U.S. ETF market is drawing record inflows. U.S.-listed ETFs have seen net inflows of about 2,084 trillion won so far this year, already surpassing last year's annual record of about 2,056 trillion won, according to Samsung Securities. "Seasonal inflows typically continue into the fourth quarter as well, so this year's annual net inflows could expand further," said Han Su-jin, an analyst at Samsung Securities.
