Net purchases reached $5.3 billion in June and July, but losses in SOXL, Tesla, Nvidia and leveraged ETFs left retail investors down about $36 billion.
South Korean retail investors are estimated to have lost about $36 billion on US stock investments over the past two months, even as they shifted fresh money into overseas equities. Holdings of US stocks owned by domestic investors stood at $170.4 billion as of July 30, down 16.5% from $204.1 billion at the end of May, according to Seibro, the securities information portal operated by Korea Securities Depository. Over that period, investors were net buyers of US shares, purchasing $632.96 million in June and $4.66862 billion in July, for a total of about $5.3 billion. The figures imply a roughly $33.7 billion decline in portfolio value and total losses of about $36 billion. Buying was concentrated in leveraged products such as SOXL, a 3x ETF linked to the Philadelphia Semiconductor Index, where $3.77486 billion of net purchases translated into only a modest rise in holdings value. Losses were also heavy in major positions including Tesla and Nvidia. The shift into US stocks followed a sharp fall in the Kospi after it peaked at 9,114.55 on June 20, but returns in US markets were also weak, with Korean investors’ losses outpacing declines in the main US indexes. Citi Global Markets Securities also said domestic leveraged ETFs tied to Korean assets saw market capitalization plunge from about $52.5 billion on June 22 to around $19 billion, with cumulative retail investor losses estimated at about $38.7 billion.