Key facts
- South Korean individual investors bought a net $7.04 billion in U.S. stocks from July 1 to August 27.
- This two-month total was 70% of their net purchases in the first half of the year.
- The KOSPI market has been in a correction since late June.
- The S&P 500 and Nasdaq Composite showed gains during the period.
- Direxion Daily Semiconductor Bull 3X Shares (SOXL) was the most popular U.S. stock, with $3 billion in net purchases.
- Investors sold Nvidia, Palantir Technologies, and Micron Technology shares.
South Korean individual investors have significantly increased their investment in U.S. stocks, purchasing a net $7.04 billion over the past two months. This surge in overseas investment comes as the local equity market, represented by the Korea Composite Stock Price Index (KOSPI), has undergone a correction since hitting a record high in late June. Retail investors bought a net 8.75 trillion won in the KOSPI and 1.57 trillion won in the secondary KOSDAQ market during the same period.
The shift in investment strategy is attributed to the relative strength of U.S. markets, with the S&P 500 and Nasdaq Composite showing gains while the KOSPI has been trading in the 6,000-point range for over a month. The Direxion Daily Semiconductor Bull 3X Shares (SOXL) emerged as the top pick among South Korean investors, attracting $3 billion in net purchases. Other popular U.S. stocks included Alphabet and SpaceX, while investors divested from Nvidia, Palantir Technologies, and Micron Technology.
Shin Seung-jin, a researcher at Samsung Securities, noted that increasing volatility in the KOSPI and losses in semiconductor shares are encouraging investment in the U.S. market. The two-month net purchase of U.S. stocks by South Korean individuals was equivalent to 70 percent of their total net purchases in the first half of the year.