Why South Korean Retail Investors Are Returning to U.S. Stocks Even After Samsung Earned $800 Million a Day

Kospi Stuck in a Range as Money Chases Record-High U.S. Stocks

Top Net Buys Over the Past Month Include Ultra-Short Treasuries, High-Dividend ETFs and Alphabet

The value of U.S. stocks held by South Korean retail investors has climbed back above $200 billion for the first time in four months. The shift suggests buying is flowing into a U.S. market that has been hitting fresh records almost daily while the Kospi remains rangebound.

According to the Korea Securities Depository's Seibro securities information portal, the value of U.S. stocks held in custody by domestic investors stood at $200.86226 billion as of October 8.

That marked the first time holdings by South Korea's so-called "Seohak ants" — retail investors who buy overseas shares, especially in the U.S. — topped $200 billion since June 4, when they stood at $201 billion.

Custodied U.S. stock holdings first exceeded $200 billion on May 11, reaching $200.14 billion, as retail buying continued alongside this year's rally in U.S. equities.

The total then rose to a record $206.3 billion on June 2. It later fell as U.S. stocks lagged the Kospi, dropping to $194.84793 billion at the end of June and $171.4658 billion at the end of July.

Holdings rebounded to $188.36649 billion at the end of August and increased again to $194.2 billion at the end of September.

The renewed increase appears to reflect diverging market performance during that period. The Kospi has been stuck in a range, while U.S. equities, led by technology shares, have continued to set record highs.

After touching the 9,000 level in June and quickly falling to the 5,500 range by the end of July, the Kospi has fluctuated around 6,500 since August.

By contrast, the S&P 500 and Nasdaq have extended their gains on the back of technology stocks, and both indexes hit fresh record highs again on October 7.

Samsung Electronics, the Kospi's biggest stock, has also failed to lift sentiment. The company posted preliminary third-quarter operating profit of 107.4 trillion won, or about $80 billion, becoming the first global technology company to report quarterly operating profit above 100 trillion won, yet its shares fell instead. That means Samsung earned more than 35 trillion won a month and more than 1.1 trillion won a day in the July-to-September quarter.

As of October 8, the most widely held names among South Korean retail investors were Tesla, Nvidia, Alphabet, the Invesco QQQ Trust Series 1 ETF, the Direxion Daily Semiconductor Bull 3X Shares ETF and the Vanguard S&P 500 ETF.

Over the past month, the biggest net purchases were the iShares 0-3 Month Treasury Bond ETF at $258.82 million, the Schwab U.S. Dividend Equity ETF at $248.85 million, Alphabet at $202.08 million, the Direxion Daily Semiconductor Bull 3X Shares ETF at $188.22 million, the Vanguard S&P 500 ETF at $187.26 million and the Invesco Nasdaq 100 ETF at $137.21 million.

Noh Jung-dong, Hankyung.com reporter, dong2@hankyung.com