SEOUL — South Korean retail investors—affectionately referred to in financial markets as "Seohak Ants" for their diligent and aggressive buying of foreign equities—have executed a swift strategic pivot back toward individual mega-cap technology stocks. Driven by stronger-than-expected quarterly earnings from major U.S. Big Tech firms and their cloud divisions, retail traders are turning away from highly leveraged exchange-traded funds (ETFs) in favor of fundamental tech equities.
According to data released on August 8 by the Korea Securities Depository’s SEIBro portal, South Korean retail investors net purchased $151.49 million (approx. 215 billion KRW) worth of Amazon shares between August 3 and August 6. Memory chip giant Micron Technology followed closely with $151.02 million (approx. 214 billion KRW) in net buying, while flash memory manufacturer SanDisk ranked third with $147.62 million (approx. 29.2 billion KRW) in net capital inflows.
This marks a dramatic turnaround from July’s trading landscape. Throughout the previous month, neither Amazon, Micron, nor SanDisk ranked within the top 50 foreign stock purchases among Korean retail investors. Instead, retail capital was concentrated in the Direxion Daily Semiconductors Bull 3X Shares ETF (SOXL)—a triple-leveraged product tracking the Philadelphia Semiconductor Index—and American Depositary Receipts (ADRs) of SK Hynix, which held the top two spots.
In the first week of August, however, SK Hynix ADRs fell to fifth place, while SOXL dropped completely out of the top 50 list. During the same August 3–6 period, Korean retail traders dumped a net $1.84 billion (approx. 2.61 trillion KRW) of SOXL. Market analysts note that after SOXL’s share price plunged below $100 from its July peak above $200, its recent sharp recovery offered investors a clear opportunity to take profits and realign their portfolios.
The rally in individual tech shares was ignited on July 31 (local time) when cloud business units of U.S. tech giants delivered surprise quarterly outperformance. On that day alone, Amazon surged 15.32%, Micron soared 18.36%, SanDisk jumped 25.99%, AMD rose 13.00%, and Intel gained 11.30%, lifting the Philadelphia Semiconductor Index by 8.19%.
Meanwhile, changes are also taking place in South Korea’s domestic market. Between July 31 and August 6, the ETF receiving the largest capital inflow was 'KODEX Leverage' at 448.2 billion KRW, followed by 'KODEX Kosdaq 150' (423.7 billion KRW), 'KODEX 200' (382.7 billion KRW), 'TIGER US S&P 500' (199.1 billion KRW), and 'KODEX Kosdaq 150 Leverage'.
This rotation into broad index leveraged funds reflects a "balloon effect" caused by stricter regulations on single-stock leveraged products. Effective July 31, Korean financial authorities raised the basic deposit requirement for single-stock leveraged ETF trading from 10 million KRW to 30 million KRW, causing single-stock leveraged products to fall outside the top 80 ranking in fund inflows.
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