Retail investors sell U.S. individual stocks and buy ETFs instead, sweeping the top ranks of U.S.-related net purchases

[Financial News] Domestic individual investors have been selling U.S. individual stocks and shifting into related exchange-traded funds (ETFs) this month. After taking profits, they are moving money into ETFs that offer diversification. The trend suggests a shift from direct investment in U.S. stocks to indirect investment.
According to the financial investment industry on the 21st, domestic investors net sold $1.39617 billion, or about 2.0519 trillion won, in the U.S. stock market from the 1st to the 20th of this month. By contrast, U.S.-related products dominated the top net-bought ETF list for individual investors over the same period. Excluding inverse products, six of the top 10 ETFs bought by individuals were U.S.-related products. In other words, investors sold U.S. individual stocks but bought related ETFs.
Excluding leveraged and inverse products, the top ETF purchase by individuals this month was TIGER U.S. Space Tech ETF, which attracted 204 billion won. It was followed by TIGER U.S. S&P 500 in second place with 160.7 billion won, TIGER U.S. Dividend Dow Jones ETF in third with 148.9 billion won, KODEX NASDAQ 100 in fourth with 121.4 billion won, KODEX US AI Optical Communication Network ETF in fifth with 114 billion won, and KODEX U.S. S&P 500 ETF in seventh with 101.4 billion won.
Funds are flowing not only into flagship U.S. index products but also into growth-themed ETFs such as space and artificial intelligence (AI) infrastructure. The buying is not limited to stable index products; it is also spreading to industry themes expected to grow in the future. In particular, the surge in demand for Space Tech-related products appears to reflect expectations for growth in the private space industry and investment demand for related companies.
Koh Min-seong, a researcher at NH Investment & Securities, said, "News of Space Exploration Technologies Corp. (SpaceX)'s initial public offering (IPO) is drawing intense attention to the U.S. Space Tech market," and added, "A paradigm shift and revaluation across the space industry are expected as SpaceX's valuation rises."
Analysts also say the diverging direction between individual stocks and ETFs reflects continued preference for the U.S. stock market, while the burden of picking individual names has grown. The U.S. market has rebounded recently on easing geopolitical risks in the Middle East and expectations for stable interest rates, but volatility remains high from stock to stock.
In particular, as Big Tech shares have swung sharply in a short period, demand has expanded for ETFs that allow investors to buy the market as a whole or diversify into industry themes rather than invest directly in individual names. The recent rebound in the S&P 500 and NASDAQ has also been cited as a factor boosting ETF buying sentiment.
Another view is that profit-taking demand and foreign-exchange gains were behind the net selling of U.S. individual stocks. Investors who bought on dips late last month appear to have taken profits during this month’s rebound, while also seeking gains from the won–dollar exchange rate.
The impact of the Reshoring Investment Account (RIA), introduced by the government to encourage the return of overseas stock investment funds to the domestic market, was also significant. According to KOFIA, the cumulative balance of RIAs stood at 881.5 billion won as of the 16th, up 17-fold from 51.9 billion won on the 23rd of last month, when the product was first launched.
One securities industry official said, "Expectations for a rise in the U.S. stock market remain intact, but because volatility in individual stocks is high, demand for diversified investment through ETFs is increasing rather than direct investment." The official added, "Depending on the upcoming U.S. earnings season, the interest-rate path and exchange-rate trends, individual investors' preferences for direct investment and ETFs could shift again."
koreanbae@fnnews.com Bae Han-geul Reporter