“Retail investors never rest” ... They snapped up 2 trillion won worth of stocks as the KOSPI plunged, but SOXL also came crashing down

[Financial News] As South Korea’s stock market plunged, individual investors bought nearly 3 trillion won worth of U.S. stocks in the first week of November alone.

According to SEIBro, the Korea Securities Depository’s securities information portal, domestic investors’ net purchases of U.S. stocks from the 2nd to the 6th totaled $2.19753 billion (about 2.982 trillion won), the figures released on the 7th showed.
That exceeded the total net purchases for August ($1.96234 billion). It was more than double September’s monthly total ($1.00128 billion) and amounted to about 40% of the total for October ($5.42312 billion).
Retail investors from South Korea have shown a clear shift in their U.S. stock investments compared with the first half of this year. In April and May, in line with the government’s policy encouraging investment to return to the domestic stock market, they were net sellers in the U.S. market, selling $468.93 million and $939.77 million, respectively.
But after returning to net buying in June, they steadily increased their purchases. October’s monthly net purchases were the highest in 11 months.
Over the same period, individual investors’ net purchases on the KOSPI market totaled 3.9 trillion won, narrowing the gap between investment in domestic and U.S. stocks.
This is thought to reflect the KOSPI’s failure to sustain its rally in the first half, its months-long downward trend, and the recent sharp drop. On the 6th, the KOSPI closed at 5,059.69, down 6.02% from the previous trading day, while the KOSDAQ closed at 644.27, down 5.03%.
The won-dollar exchange rate, which at one point topped 1,500 won before falling to the mid-1,300s, is also cited as a factor that made investing in U.S. stocks more attractive.
The U.S.-listed security that attracted the most money from South Korean investors so far this month was Direxion Daily Semiconductor Bull 3X Shares (SOXL), an exchange-traded fund (ETF) that offers three times the exposure to a semiconductor index. Net purchases totaled $1.62525 billion (about 2.2168 trillion won), accounting for at least 70% of all net purchases of U.S. stocks.
Investors made net purchases of $497.05 million in Alphabet Inc., Google’s parent company, and $220.22 million in ProShares UltraPro QQQ (TQQQ), which tracks three times the Nasdaq-100 Index’s daily return.
As investment in U.S. stocks grows, cash waiting on the sidelines in the domestic stock market is dwindling.
According to the Korea Financial Investment Association (KOFIA), investor deposits stood at 88.5338 trillion won as of the 5th and have remained below 100 trillion won for nearly a month since the 13th of last month.
The outstanding balance of margin loans, an indicator of “debt-financed investing” (investing with borrowed money), stands at 28.7715 trillion won. Investor deposits and margin loan balances typically rise in a bull market, but both have been declining as the recent downturn continues.

However, funds also flowed into the domestic stock market, mainly into ETFs that bet on index gains. From the 2nd to the 6th, the domestic ETF that attracted the most money was Mirae Asset TIGER 200 ETF (200 billion won). KODEX KOSDAQ 150 Leverage ETF and TIGER CD Rate Investment KIS (Synthetic) also attracted 144.4 billion won and 120.1 billion won, respectively.
The ETF bought most by individual investors was KODEX KOSDAQ 150 Leverage ETF (373.5 billion won), followed by KODEX LEVERAGE (342.4 billion won) and Samsung KODEX 200 ETF (243 billion won).
[email protected] Seong Min-seo Reporter