South Korean Retail Investors Buy Over $7 Billion in U.S. Stocks Over Two Months

South Korean individual investors purchased a net total of $7.04 billion in U.S. stocks from July 1 through the last Thursday of August. According to data from the Korea Securities Depository, this two month total represents 70 percent of the net purchases made during the first half of the year, which totaled $9.87 billion. The investment trend included $4.64 billion in July and $2.4 billion during the first 27 days of August.

This shift toward U.S. markets occurred as the benchmark Korea Composite Stock Price Index (KOSPI) underwent a correction. After hitting a record closing high of 9,114.55 points on June 22, the index dropped to the 7,000 point level on the second trading day of July and has remained in the 6,000 point range since mid July. During the same period, U.S. indices remained strong. The S&P 500 rose from 7,499.36 points at the end of June to 7,730.99, while the Nasdaq Composite increased from 26,213.72 to 26,541.35.

The most popular choice among Korean investors was the Direxion Daily Semiconductor Bull 3X Shares, a leveraged ETF, with net purchases of $3 billion. Investors also bought net amounts of SK hynix American depositary receipts ($815.42 million), Alphabet ($647.17 million), and SpaceX ($514.96 million). Conversely, they sold net amounts of Nvidia shares ($748.9 million), Palantir Technologies shares ($615.4 million), and Micron Technology shares ($353.93 million).

Shin Seung-jin, a researcher at Samsung Securities, stated that investment in the U.S. has been encouraged by losses in semiconductor shares and increasing volatility in the KOSPI. During the same two month period, retail investors also purchased a net 8.75 trillion won ($6.34 billion) in the KOSPI market and 1.57 trillion won in the secondary KOSDAQ market.