Individuals poured 34 trillion won into blue chips, then bet 5.6 trillion won on leveraged 'Samsung-SK hynix' ETFs

[Financial News] Domestic retail investors have net bought more than 34 trillion won worth of Samsung Electronics and SK hynix shares over the past month. They also poured more than 5.6 trillion won into leveraged exchange-traded funds (ETFs) tied to single stocks, led by the two chipmakers. The pattern suggests investors are increasingly buying both the underlying shares and leveraged products at the same time, as expectations grow for a recovery in the semiconductor sector.
According to the Korea Exchange on the 20th, retail investors net bought 13.1761 trillion won of Samsung Electronics and 21.0629 trillion won of SK hynix from June 16 to July 16. Combined net buying in the two stocks reached 34.239 trillion won.
Over the same period, foreign investors net sold 15.526 trillion won of Samsung Electronics and 21.9202 trillion won of SK hynix. In effect, retail investors absorbed most of the large-scale profit-taking by foreigners, helping support demand for the sector's flagship stocks.
Retail investors net bought a total of 5.6379 trillion won in four single-stock leveraged ETFs from KODEX and Mirae Asset TIGER ETF, the products with the highest trading volume and net asset size. They bought 1.1698 trillion won of the Samsung Electronics Single-Stock Leveraged ETF, 395.8 billion won of the TIGER Samsung Electronics Single-Stock Leveraged ETF, 2.7433 trillion won of the KODEX SK Hynix Single Stock Leverage ETF, and 1.329 trillion won of the MiraeAsset TIGER SK Hynix Single Stock Leverage ETF.
The net buying of leveraged ETFs by retail investors amounted to about 16 percent of their net purchases of the underlying shares. In other words, substantial funds flowed not only into direct stock purchases, but also into higher-risk products designed to magnify gains.
This suggests that investors are not simply buying the shares at lower prices, but are also increasing bets aimed at maximizing returns if stock prices rebound. Even as market volatility has recently widened, retail investors have continued to buy Samsung Electronics and SK hynix shares while also committing large sums to leveraged ETFs.
"Recently, more retail investors have been using single-stock leveraged ETFs not only for short-term trading, but also as a way to hold them alongside cash equities," said an official from the asset management industry. "As sentiment toward major blue-chip stocks strengthens, funds tend to flow into related ETFs as well."
Trading concentration in domestic single-stock leveraged ETFs is high even compared with major overseas markets. A high share of trading means that volatility in the cash market could be further amplified through ETF trading.
Dongchan Yeom, a researcher at Korea Investment & Securities Co., Ltd., said, "In the United States, trading volume in single-stock leveraged ETFs is about 5 percent of the trading volume in the underlying assets, while in Korea it reaches 20 to 30 percent. Even taking into account that the market is still in its early stages, the high trading share is something the market should watch closely."


dschoi@fnnews.com Choi Doo-sun Reporter