A wave of South Korean investors is flocking to U.S. markets to avoid a correction at home:
In July, South Korean retail investors net bought $4.5 billion of U.S. stocks, while their home market index entered bear territory:
- Investors are switching markets but not changing their bets, retaining exposure to AI and leveraged products:
- Korean flows are unlikely to sway broad U.S. markets but could amplify volatility in individual stocks and thinner trades:
South Korean investors, who had largely sold domestic stocks last week, are now actively buying in U.S. markets:
Buying ADRs
Of the $4.5 billion in U.S. stocks Korean investors net bought in July, around $840 million went into SK Hynix's U.S.-listed depositary receipts:
These stocks have traded at a premium, which could be a sign of speculative excess:
Leveraged bets
One of the 10 most popular U.S. stocks among investors this month was a leveraged product - ProShares Ultra QQQ ETF:
Same strategy
Investors may be changing markets without necessarily changing their strategy:
Reversal from July
Korean retail investors net bought around $4.5 billion in U.S. stocks last month:
Effect on market
The influx of Korean money may increase volatility in individual stocks, but is unlikely to have a significant impact on the overall market:
