South Korean Retail Investors Buy $2.2 Billion of US Stocks in a Week

First-Week Buying Tops August Total

Purchases Concentrated in 3x Semiconductor Bet SOXL

As South Korean stocks tumbled, domestic investors snapped up US equities. Net purchases in the first week of November alone reached about $2.2 billion, exceeding the total for all of August. Buying was concentrated in a triple-leveraged exchange-traded fund tied to gains in US semiconductor shares.

Data from Seibro, the securities information portal operated by the Korea Securities Depository, showed South Korean investors were net buyers of $2.19753 billion of US stocks from Nov. 2 to Nov. 6, as of inquiries made on Nov. 7. That was higher than August's $1.96234 billion and more than double September's $1.00128 billion. It also amounted to about 40% of last month's total, which was the largest in 11 months.

The most heavily bought product was the Direxion Daily Semiconductor Bull 3X Shares ETF, ticker SOXL. Net purchases totaled $1.62525 billion over the period, or about 74% of all net buying of US stocks. The fund tracks three times the daily return of the NYSE Semiconductor Index before fees.

Alphabet saw net buying of $497.05 million. Net purchases of the ProShares UltraPro QQQ ETF, ticker TQQQ, which tracks three times the daily return of the Nasdaq-100 Index, reached $220.22 million.

Demand for US stocks has continued since June. South Korean investors were net sellers in April and May, unloading $468.93 million and $939.77 million, respectively, as the government rolled out policies aimed at luring money back into the domestic stock market. They turned net buyers in June. The won-dollar exchange rate, which had once risen above 1,500 won per dollar, has recently fallen to the mid-1,300 won range, easing the burden of buying dollar assets.

Over the same period, net purchases on South Korea's benchmark stock market totaled 4.2 trillion won. In won terms, net buying of US stocks was equivalent to about 71% of that amount.

Investor deposits, cash waiting on the sidelines of the domestic stock market, have fallen below 100 trillion won. The Korea Financial Investment Association said the balance stood at 88.5338 trillion won as of Nov. 5 and has not recovered that level since falling below it on Oct. 13. Margin loan balances were 28.7715 trillion won.