South Korean retail investors have significantly increased their holdings in U.S. stocks, with their total investments surpassing $100 billion for the first time. According to the Korea Securities Depository, as of November 7, the value of U.S. stocks held by these investors has risen by 64% compared to the same period last year, reaching $101.4 billion.
This trend is attributed to the pursuit of higher returns, leading many to directly invest in U.S. markets. The S&P 500 Index has risen by 26.41% so far this year, in stark contrast to the Kospi Index, which has declined by 5.17%, marking it as one of the poorest-performing global indices.
Despite efforts by South Korean authorities to bolster the local stock market through improved corporate practices, retail investors have sold a net 4.4 trillion Korean won ($3.2 billion) in Kospi stocks this year. Instead, they have increased investments in more volatile assets like cryptocurrencies and tech stocks.
Amongst the U.S. stocks, Tesla (TSLA, Financial) remains the most favored, with South Korean investors holding $16.7 billion worth of shares. Other popular stocks include Nvidia (NVDA) at $13.8 billion, Apple (AAPL) at $4.6 billion, and Microsoft (MSFT) at $3.6 billion.
Besides direct stock purchases, there is also growing interest in leveraged exchange-traded funds (ETFs) that track U.S. tech stocks, resulting in high demand. Notably, two of the top six heavily invested assets among these investors include a triple-leveraged Nasdaq 100 ETF and a triple-leveraged U.S. chip stocks fund.
