'Absolutely crazy': Here's what South Korean stock investors are doing in U.S. markets
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- Korean retail investors net bought about $4.5 billion of U.S. stocks in July, a sharp pickup from June and close to January’s roughly $5 billion.
- Korea Exchange data showed retail investors net sold domestic stocks for most of last week even as the benchmark entered bull-market territory, while overseas investors reversed to become net buyers.
- Korea Securities Depository data showed about $840 million of July purchases went to SK Hynix’s U.S.-listed ADRs, the second-most net-purchased U.S. security despite investors’ ability to buy the company directly at home.
- Owen Lamont said the ADRs traded at a recent 10% premium to SK Hynix’s Korean shares with greater volatility, adding that there was no reason for a Korean investor to buy them.
- SOXL ranked first among Korean investors’ most net-purchased U.S. stocks in July; four of the top 10 were leveraged products, with ProShares UltraPro QQQ fourth and ProShares Ultra QQQ sixth.
- Phillip Wool said much of the U.S. buying remained tied to the same AI hardware theme selling off locally, with some traders shifting toward U.S. AI stocks they perceived as higher-quality or more liquid.
- Korea Financial Investment Association reported margin-loan balances fell from about 37 trillion won at the end of June to 27 trillion won earlier this month, the lowest level this year.
Why it matters: Korean retail investors are changing the geographic vehicle, not the underlying exposure: the buying largely remains tied to the AI hardware theme, including about $840 million in SK Hynix ADRs. Four of their 10 most-purchased U.S. stocks were leveraged products, concentrating risk in volatile corners even as domestic margin debt fell to 27 trillion won.
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