“AI and Semiconductors Are Back”—Korean Retail Investors Turn to Net Buying of U.S. Stocks

[Financial News] Korean individual investors who invest in U.S. markets have recently started buying U.S. stocks again. As expectations for the artificial intelligence (AI) and semiconductor sectors revive, buying has strengthened, particularly in technology stocks.
According to Save-ro, KSD's securities information portal, Korean investors held $197.47874 billion worth of U.S. stocks in custody from the 1st through the 21st, based on the inquiry date. That amounted to approximately 268.571 trillion won.
The value of U.S. stocks held in custody rose to a record $204.16072 billion in May, then fell for two consecutive months to $194.84793 billion in June and $171.4658 billion in July. It rose again to $188.36649 billion in August and recovered to around $197.5 billion this month.
Buying also picked up again. From the 1st through the 22nd of this month, Korean investors made net purchases of $527.3 million worth of U.S. stocks, or approximately 717.1 billion won.
Although net selling continued early this month, investors shifted to net buying after the 14th, strengthening the trend of purchasing U.S. stocks.
From the 1st through the 22nd of this month, the product with the largest net purchases by Korean investors was the iShares 0-3 Month Treasury Bond ETF (SGOV), which invests in short-term U.S. Treasury bonds with maturities of three months or less. The product is used as a parking-style exchange-traded fund (ETF) for temporarily holding funds before deciding where to invest.
Net purchases of SGOV totaled $223.56 million, followed by $146.2 million for the Schwab U.S. Dividend Equity ETF (SCHD) and $140.45 million for the Vanguard S&P 500 ETF. IonQ and Alphabet also recorded net purchases of $123.48 million and $120.61 million, respectively.
As expectations for the AI and semiconductor sectors grew again, investors also concentrated their purchases in high-risk leveraged semiconductor products.
The leveraged ETF SOXL (Direxion Daily Semiconductor Bull 3X Shares), which tracks three times the daily return of a U.S. semiconductor index, recorded purchases of $2.51384 billion, or approximately 3.3274 trillion won, from the 1st through the 22nd. It had the largest purchase amount among all securities.
Individual AI and semiconductor companies also ranked among the top net purchases. NVIDIA ranked fifth at $45.55 million, while Micron Technology ranked ninth at $36.21 million. IonQ ranked 12th at $26.99 million, SanDisk ranked 13th at $26.45 million, and TSMC ranked 15th at $23.97 million.

External variables that could change the direction of U.S. markets also remain. Along with a U.S.-China summit and developments in the Middle East, major political events are scheduled, including the U.S. midterm elections in November.
By contrast, the domestic ETF market has recently shrunk. According to Korea Exchange (KRX), the domestic ETF market's capitalization first exceeded 300 trillion won in January and then surpassed 500 trillion won in May. It topped 519 trillion won on June 25, but declined after the domestic stock market correction in the second half of the year, falling to 456 trillion won on the 18th. That represents a decrease of more than 60 trillion won in about three months.
The KOSPI Composite Index has recovered substantially from its low, but it has been moving between the 6,000 and 7,000 levels without establishing a clear direction. The market capitalization of South Korean stocks has also been fluctuating around 6,000 trillion won.


[email protected] Han Seung-gon Reporter