Korean retail investors in US stocks net purchased $1.948 billion (approximately 2.9 trillion won) from early month to the 20th, according to Korea Securities Depository (KSD) and financial investment industry data released on the 21st. Despite this buying activity—the second consecutive month of net purchases following $633 million last month—the total custody amount of US stocks held by domestic investors decreased from $204.2 billion at the end of May to $177.3 billion as of the 17th. The decline reflects increased volatility in US technology and semiconductor stocks amid semiconductor peak-out concerns affecting both Korean and US markets.
Korean Investors Net Purchase $1.948 Billion in US Stocks Through the 20th
From early month to the 20th, Korean individual investors net purchased $1.948 billion in US stocks through KSD. This represents approximately triple the $633 million net purchase recorded last month. The net buying marks a reversal from April and May, when investors showed consecutive net selling.
US Stock Custody Amount Declines to $177.3 Billion Despite Net Buying
The custody amount of US stocks held by Korean investors stood at $177.3 billion (approximately 256 trillion won) as of the 17th, down from $194.8 billion (approximately 287 trillion won) at the end of last month and $204.2 billion (approximately 301 trillion won) at the end of May. The custody amount represents the dollar-denominated value of US stocks held by domestic investors. The decrease indicates that the value of held stocks declined despite continued purchasing activity.
RIA Tax Benefit Expiration in Late May Preceded Return to US Market
The government introduced the Returning Investment Account (RIA) system to encourage investors to return to the domestic market, with the product launching in March. RIA provides temporary capital gains tax benefits when investors convert overseas stock sale proceeds to Korean won and invest long-term in the domestic market. The 100% capital gains tax exemption benefit through RIA ended in late May. Following this expiration and improved US market conditions compared to early in the year, investors renewed their interest in US stocks.
Major Holdings Experience Price Declines from Recent Highs
According to KSD's securities information portal, Korean investors' custody amounts are concentrated in US technology stocks including Tesla, NVIDIA, Google, Apple, Micron, SanDisk, Amazon, and TSMC ADR (American Depositary Receipt). Tesla closed at $369.57 on the 20th after reaching a high of $425.30 this month on a closing basis. NVIDIA closed at $203.28 on the 20th after reaching $212.50 earlier this month. Micron, which traded in the $1200 range last month, closed in the $860 range on the 20th. An industry official stated that semiconductor peak-out concerns in Korea affected the US market, combined with US-Iran geopolitical issues, creating a cycle that repeatedly stimulated the domestic market, with both Korean investors and US stock investors affected by the downturn.
FAQ
What amount did Korean investors net purchase in US stocks through the 20th?
Korean individual investors net purchased $1.948 billion (approximately 2.9 trillion won) in US stocks from early month to the 20th through Korea Securities Depository, according to data released on the 21st.
Why did the US stock custody amount decrease despite net buying activity?
The custody amount decreased from $204.2 billion at the end of May to $177.3 billion as of the 17th due to price declines in major holdings such as Tesla, NVIDIA, and Micron amid increased volatility in US technology and semiconductor stocks.
When did the RIA tax benefit end?
The 100% capital gains tax exemption benefit through the Returning Investment Account (RIA) system ended in late May.
