Korean retail investors net purchased $2.8788 billion in US stocks from July 1-21, quadrupling June's $632.95 million, as KOSPI volatility intensified with the index sliding to the 6500 level. The shift occurred amid a 30%+ decline in Samsung Electronics and SK Hynix stocks from recent peaks, driven by semiconductor sector peak-out concerns and Middle East geopolitical risks. Investor deposits—funds awaiting deployment in Korean stocks—dropped approximately ₩8 trillion from ₩120.0837 trillion on July 1 to ₩112.519 trillion on July 20, according to Korea Financial Investment Association data, while the won-dollar exchange rate's decline from ₩1560 in early July to the ₩1470s encouraged dollar purchases for US stock investments.
Korean Investor Deposits Drop ₩8 Trillion in July
Korean investor deposits fell from ₩120.0837 trillion on July 1 to ₩112.519 trillion on July 20, a decline of approximately ₩8 trillion, according to Korea Financial Investment Association figures. The data from Korea Securities Depository's SEIBro portal showed US stock net purchases over July 1-21 reached $2.8788 billion, with approximately $1 billion added in the two-day period of July 20-21 alone. Monthly US stock net purchases had declined from $4.4986 billion in January to $1.6915 billion in March before turning to net selling in April-May, then returning to net buying in June.
KOSPI volatility stemmed from the combined 30% market capitalization weight of Samsung Electronics and SK Hynix, whose stocks each dropped over 30% from peaks since mid-June. The two companies' market cap represents approximately 30% of the entire KOSPI index.
Won-Dollar Rate Decline Spurs US Stock Demand
The won-dollar exchange rate peaked at ₩1560 in early July before declining to the ₩1470 range recently. Min Kyung-won, economist at Woori Bank, stated that "companies importing raw materials tend to secure dollars in advance for future settlements when the exchange rate falls," adding that "given they maintained a strategy of buying even when rates exceeded ₩1500, dollar accumulation demand is likely to continue at current levels."
Min explained that "Korean investors' overseas stock investments also require currency exchange to purchase US stocks, so the recent increase in investment weight is supporting dollar demand."
Korean Investors Pour ₩1.19 Trillion into TIGER US S&P500 ETF
Korean retail investors purchased ₩119.3 billion of TIGER US S&P500 ETF during July 15-21, according to KOSCOM ETF CHECK data. Other major purchases included KODEX US NASDAQ100 (₩94.4 billion), KODEX US S&P500 (₩71.2 billion), and TIGER US NASDAQ100 (₩64.8 billion). Capital flowed into Korean-listed ETFs tracking major US indices as domestic market uncertainty persisted.
SOXL and SK Hynix ADR Lead July Net Purchases
Directxion Daily Semiconductor Bull 3X (SOXL), a leveraged ETF tracking three times the Philadelphia Semiconductor Index, ranked first in Korean investor net purchases for July. SK Hynix American Depositary Receipts accumulated nearly ₩900 billion in net purchases within six days of listing, ranking second.
This contrasts with January's pattern, when Alphabet, Tesla, and Vanguard S&P500 ETF (VOO) dominated purchases. Recent top purchases included SOXL, SK Hynix ADR, QLD, and Applied Materials—primarily AI semiconductor stocks and leveraged products. The shift reflects investors targeting high-volatility instruments to capture potential rebounds after domestic market declines.
SK Hynix ADR Trading May Influence Domestic Stock Liquidity
Securities firms expect SK Hynix ADR capital inflows to affect domestic share liquidity through arbitrage and hedging transactions. US fund managers have launched single-stock leveraged and inverse ETFs based on SK Hynix ADR following its listing.
Han Su-jin, researcher at Samsung Securities, noted that "US ETF operators are consecutively launching single-stock leveraged and inverse ETFs related to SK Hynix ADR immediately after its listing," adding that "the US has no price limit system, so volatility could expand more significantly than in Korea."
FAQ
Q: How much did Korean investors net purchase in US stocks during July 1-21?
A: Korean investors net purchased $2.8788 billion in US stocks from July 1-21, according to Korea Securities Depository data—four times June's $632.95 million.
Q: Why did Korean investor deposits decline in July?
A: Investor deposits fell approximately ₩8 trillion from ₩120.0837 trillion on July 1 to ₩112.519 trillion on July 20, according to Korea Financial Investment Association data, as capital shifted to US stocks amid KOSPI volatility driven by 30%+ declines in Samsung Electronics and SK Hynix.
Q: What US stocks did Korean investors purchase most in July?
A: Direxion Daily Semiconductor Bull 3X (SOXL) ranked first in net purchases for July, followed by SK Hynix ADR with nearly ₩900 billion accumulated in six days post-listing, according to source data.
