Korean retail investors purchased a net $2.596 billion in US stocks from July 1 to 24, quadrupling June's $632.96 million and reversing two months of net selling, according to Korea Securities Depository data released on the 27th. The surge followed extreme volatility in domestic markets, where KOSPI dropped 21% to 1785.86 points and KOSDAQ fell 18% to 167.96 points as of the previous trading day, triggering circuit breakers twice and sidecars 11 times. Kim Sang-yul, director at Mirae Asset Global ETF Management, attributed the capital flight to memory semiconductor peak-out concerns destabilizing KOSPI while S&P 500 and NASDAQ 100 remained relatively stable, combined with won appreciation to the 1460-per-dollar range reducing dollar conversion costs.
Korean Investors Reverse Two-Month Selling Streak in US Stocks
Korean investors sold a net $468.92 million in US stocks in April and $199.76 million in May before returning to net purchases in June. The July 1-24 settlement amount of $2.596 billion represents approximately four times the June total of $632.96 million. Kim Sang-yul noted that asset allocation toward US markets as an alternative during domestic turbulence has become an established investment pattern among Korean retail investors.
KOSPI Volatility Triggers Circuit Breakers and Sidecars
KOSPI experienced two circuit breaker activations and 11 sidecar triggers during the month as the index fell 21% to 1785.86 points. KOSDAQ dropped 18% to 167.96 points over the same period. Kim Sang-yul stated that investors unable to tolerate asset volatility migrated to relatively stable markets, with S&P 500 and NASDAQ 100 maintaining steadier performance compared to the sharp correction in KOSPI over a short timeframe.
Overseas Equity ETFs Gain 2.6 Trillion Won as Domestic Funds Drop 41 Trillion Won
Overseas equity ETF net assets reached 128.9 trillion won as of the 24th, an increase of 2.6 trillion won for the month, according to Korea Financial Investment Association data. Domestic equity ETF assets declined 41.1 trillion won to 158.8 trillion won during the same period. Jung Yong-taek, researcher at IBK Securities, explained that heavy investment in index products reflects risk avoidance behavior, particularly in US markets where investors lack detailed knowledge of individual stocks and therefore track indices.
Eight US Index ETFs Enter Top 20 Retail Purchases
Eight US market ETFs appeared in the top 20 products by individual investor net purchases, up from six the previous month. The list included TIGER US S&P 500, KODEX US NASDAQ 100, KODEX US S&P 500, TIGER US NASDAQ 100, TIGER US Dividend Dow Jones, TIGER US NASDAQ 100 Target Daily Covered Call, TIME US NASDAQ 100 Active, and TIGER US NASDAQ 100 Leverage (Synthetic), with most products tracking major indices. Kim Sang-yul noted that Samsung Electronics and SK Hynix account for nearly 60% of KOSPI 200 weight, creating high dependence on specific industries and stocks, and that volatility in these two stocks driven by short-term semiconductor industry peak-out concerns has amplified market swings.
FAQ
How much did Korean investors purchase in US stocks in July?
Korean investors purchased a net $2.596 billion in US stocks from July 1 to 24, according to Korea Securities Depository data released on the 27th. This amount is approximately four times the June net purchase total of $632.96 million.
Why did Korean investors increase US stock purchases in July?
Kim Sang-yul, director at Mirae Asset Global ETF Management, attributed the increase to extreme volatility in KOSPI, which fell 21% and triggered circuit breakers twice and sidecars 11 times, combined with won appreciation to the 1460-per-dollar range reducing currency conversion costs. Investors migrated to relatively stable US markets where S&P 500 and NASDAQ 100 maintained steadier performance.
Which US ETFs did Korean retail investors purchase most in July?
Eight US market ETFs entered the top 20 products by individual investor net purchases, including TIGER US S&P 500, KODEX US NASDAQ 100, KODEX US S&P 500, TIGER US NASDAQ 100, TIGER US Dividend Dow Jones, TIGER US NASDAQ 100 Target Daily Covered Call, TIME US NASDAQ 100 Active, and TIGER US NASDAQ 100 Leverage (Synthetic). Most products tracked major US indices.
