South Korean retail investors' US stock net purchases reached a 5-month high during Jan 1-22, according to data released by Korea Securities Depository on July 23. Net buying totaled $2.975 billion (approximately 4.4 trillion won), the largest amount since February. The surge was driven by won appreciation, with the won-dollar exchange rate falling 6.4% from 1555.8 won on July 2 to 1455.8 won as of July 23 at 3:30pm, reducing the cost of US stock purchases. Increased volatility in the domestic KOSPI index also contributed to the shift toward US equities. The buying pattern reversed the net selling trend seen in April-May, which had been influenced by a KOSPI rally and the launch of Remittance Investment Accounts (RIA).
South Korean Investors Record $2.975 Billion US Stock Net Purchases in Jan 1-22 Period
During Jan 1-22, South Korean investors maintained net buying on all but three trading days, according to Korea Securities Depository data. The won-dollar exchange rate, which had peaked at 1555.8 won on July 2 closing—the highest level since the 2008 financial crisis—declined to 1455.8 won by July 23 at 3:30pm. This 6.4% drop in the exchange rate made US stocks more affordable for Korean buyers. The domestic KOSPI's recent volatility also fueled demand for US equities as investors sought alternatives to the local market.
SOXL Accounts for 77% of Total Purchases as Leveraged ETFs Dominate
The most purchased security was SOXL, a 3x leveraged ETF tracking US semiconductor stocks, with net purchases of $2.288 billion (approximately 3.4 trillion won)—representing roughly 77% of the total net buying for the period. SK Hynix American Depositary Receipts (ADR), which listed on Nasdaq on July 10, ranked second with $615.91 million (approximately 900 billion won) in net purchases. KORU, a 3x leveraged ETF tracking Korean stock market returns, placed third at $224.2 million. The 2x Nasdaq-100 leveraged ETF QLD and 3x leveraged ETF TQQQ ranked fourth and fifth, respectively. This marked a shift from the previous month, when individual technology stocks such as SpaceX, Micron, Roundhill Memory ETF, and Marvell Technology dominated the top rankings.
Regulatory Tightening on Domestic Leveraged ETFs Cited as Contributing Factor
Analysts noted that recent regulatory actions by Korean financial authorities, including increased margin requirements for domestic single-stock leveraged ETFs, may have created a "balloon effect" driving investors toward US-based leveraged products with fewer restrictions. An asset management industry official stated that allowing market self-correction mechanisms may be preferable to excessive intervention.
FAQ
What was the total amount of US stock net purchases by South Korean investors during Jan 1-22?
South Korean investors' US stock net purchases totaled $2.975 billion (approximately 4.4 trillion won) during Jan 1-22, according to Korea Securities Depository data released on July 23. This represented the highest net buying amount in five months since February.
Which US stock did South Korean investors purchase the most during Jan 1-22?
SOXL, a 3x leveraged ETF tracking US semiconductor stocks, was the most purchased security with net buying of $2.288 billion (approximately 3.4 trillion won), accounting for roughly 77% of total net purchases during the period. SK Hynix ADR ranked second with $615.91 million in net purchases.
Why did South Korean investors increase US stock purchases in this period?
The won-dollar exchange rate fell 6.4% from 1555.8 won on July 2 to 1455.8 won by July 23 at 3:30pm, making US stocks more affordable for Korean buyers. Increased volatility in the domestic KOSPI index also contributed to the shift toward US equities.
