Data indicates that South Korean retail investors have expanded their U.S. stock investments to over $100 billion, driven by a growing interest in major technology stocks and leveraged ETFs. According to Korea Securities Depository, as of November 7, South Korean retail investors hold U.S. stocks valued at $101.4 billion, marking a 64% increase from the previous year.
This surge in investment comes as the South Korean stock market, with KOSPI down approximately 5.17% this year, has underperformed compared to the U.S. market. The S&P 500 has risen about 26.1% year-to-date, prompting more South Korean retail investors to pursue higher returns by directly investing in U.S. stocks.
Despite South Korean authorities' efforts to revive the local stock market through enhanced corporate practices, retail investors have net sold 4.4 trillion won ($3.2 billion) worth of domestic stocks by 2024. Among the preferred investment choices are assets in volatile sectors like cryptocurrency and technology stocks.
As per recent custody data, Tesla (TSLA, Financial) is the most popular stock among South Korean investors, with individuals holding a combined total of $16.7 billion. Additionally, they are holding $13.8 billion in Nvidia (NVDA) stocks, $4.6 billion in Apple (AAPL) stocks, and $3.6 billion in Microsoft (MSFT) stocks. There is also significant demand for leveraged ETFs tracking U.S. technology stocks, including those targeting triple the daily gains of the Nasdaq 100 Index and U.S. chip stocks.
