'Absolutely crazy': Here's what South Korean stock investors are doing in U.S. markets
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- SK Hynix ADRs were the second most net-purchased U.S. security by Korean retail investors in July, with roughly $840 million of the $4.5 billion in net U.S. stock purchases flowing into the chipmaker's U.S.-listed depositary receipts.
- SK Hynix ADRs traded at approximately a 10% premium to the Korean shares, a dislociation Owen Lamont of Acadian Asset Management called 'absolutely crazy' and 'a symptom of the bubble,' likening it to dot-com-era Taiwan and India examples.
- Korean retail investors net sold domestic stocks for most of last week even as the KOSPI entered bull-market territory, while overseas investors reversed course to become net buyers of Korean equities.
- Leveraged products dominated Korean net U.S. purchases in July — the Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL) ranked No. 1 most purchased, while four of the top 10 were leveraged ETFs and the ProShares Ultra QQQ landed at No. 7.
- Korean margin loan balances collapsed from about 37 trillion won ($26 billion) at the end of June to 27 trillion won earlier this month — the lowest level of 2025.
- Phillip Wool (Rayliant Global Advisors) and Jung In Yun (Fibonacci Asset Management) said the geographic pivot doesn't unwind the AI bet: Korean traders hurt by domestic semiconductor selloffs are moving into U.S. AI stocks they view as higher-quality or more liquid.
Why it matters: Korean retail is paying roughly a 10% premium to buy ADRs of companies they could purchase cheaper on the KOSPI — Owen Lamont flagged the dislociation as a 'symptom of the bubble.' Meanwhile, the $4.5 billion July flow into U.S. equities isn't a theme change; per analysts, investors simply moved the same semiconductor and AI hardware bet across borders rather than reducing it.
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