South Korean traders took profits in leveraged semiconductor ETFs after extreme July volatility, even as the domestic ETF market slumped and turnover fell under tighter single-stock leveraged ETF rules.
South Korean retail investors sold $664.39 million of Direxion Daily Semiconductors Bull 3X Shares ETF, or SOXL, on August 3, equal to 17.5% of the $3.786 billion they had net bought in July, before returning to net buying with $57.04 million on August 4. The selling came amid a broader July rout in South Korea's ETF market, where 891 domestically listed ETFs, or 78.3% of the total, declined and net assets fell by ₩77.9 trillion to ₩434.4 trillion as semiconductor stocks tumbled. While investors reduced exposure to leveraged products such as SOXL and KORU, they continued buying individual chip names including Micron, SanDisk and SK Hynix ADRs, suggesting profit-taking in high-risk trading vehicles rather than a broad retreat from equities.