South Korean Retail Investors Pour $4.5 Billion into US Stocks in July, with Approximately $840 Million Flowing into SK Hynix ADR

BlockBeats News, August 18th. Retail investors in South Korea are currently shifting their funds from the domestic stock market to the U.S. market. Data from South Korean securities depositories shows that South Korean investors net bought about $4.5 billion worth of U.S. stocks in July, with approximately $840 million flowing into SK Hynix's U.S.-listed ADR, making it one of the most heavily bought U.S. securities by South Korean investors.

Notably, South Korean investors could have directly purchased SK Hynix in the Korean market, but chose to buy its U.S. ADR instead, causing a significant price disparity between the two markets. Currently, the SK Hynix ADR is trading at a premium of about 35.8%–37% compared to the Korean domestic stock, and the U.S.-listed stock exhibits higher volatility. Irving Lamont, Senior Vice President at Acadian Asset Management, believes that this rare price difference may be a sign of market speculation excess, possibly even a symptom of a "bubble."

The shift of South Korean retail investors to U.S. stocks has not reduced their risk appetite, with core bets still on AI, semiconductors, and high-leverage products. Among the top 10 most bought U.S. stocks by South Korean investors in July, 4 were leveraged products, with the Direxion Daily Semiconductor Bull 3X ETF (SOXL) being the most popular.

Meanwhile, the balance of margin financing in the South Korean stock market has decreased from around 37 trillion Korean won at the end of June to about 27 trillion Korean won at the beginning of August. Analysts point out that South Korean retail investors may have simply shifted their high-risk AI trades, originally conducted in the domestic market, to the U.S. market, rather than truly exiting risky assets.

Industry insiders believe that the size of South Korean funds is not enough to alter the overall trend of the U.S. stock market, but their concentrated trading may further magnify the price fluctuations of highly concentrated, high-volatility assets favored by retail investors, such as AI chips, quantum computing, and leveraged ETFs.