SEOUL — While the U.S. stock market wavered under the weight of geopolitical uncertainty and shifting monetary policy last week, South Korea’s overseas investors—affectionately known as "Seohak Gaemi" (Western Ants)—saw the volatility not as a threat, but as a golden entry point.
According to data released by the Korea Securities Depository (KSD) on February 9, South Korean investors net purchased over $1.7 billion worth of leveraged Exchange-Traded Funds (ETFs) and Exchange-Traded Notes (ETNs) during the first week of February. This surge highlights a growing appetite for high-risk, high-reward instruments among retail traders looking to capitalize on a perceived "bottom" in the tech and semiconductor sectors.
The Return of the "Triple-Leverage" Play
The scale of the buying spree was remarkable even by the aggressive standards of Korean retail investors. Out of the top 50 overseas stocks net purchased last week, 20 were leveraged products. The total combined investment in these products reached $1.706 billion.
Leading the charge was the Direxion Daily Semiconductor Bull 3X Shares (SOXL), which tracks three times the daily performance of the Philadelphia Semiconductor Index. Investors poured a staggering $872.2 million into SOXL, making it the most-bought foreign security of the week.
Other high-conviction bets included:
ProShares UltraPro QQQ (TQQQ): $105.4 million (3x Nasdaq 100)
ProShares Ultra Silver (AGQ): $84.2 million (2x Silver futures)
Market analysts noted that this concentration is highly unusual. While leveraged products typically make up about 20% of the top 50 list, they accounted for 40% of the list last week, signaling a "do-or-die" sentiment among investors betting on a swift market recovery.
Navigating the "Warsh Shock" and AI Uncertainty
The aggressive buying comes on the heels of a turbulent week for Wall Street. The Nasdaq Composite fell 2.38% last week, driven by cooling sentiment surrounding Artificial Intelligence (AI) ROI and the nomination of Kevin Warsh as the next Federal Reserve Chair. Warsh’s reputation as a policy hawk sparked fears of "higher-for-longer" interest rates, leading to a broad sell-off in growth stocks.
However, Korean investors viewed this dip as a "buy the rumor" moment for Big Tech. On the individual stock front, Microsoft took the top spot with $325 million in net buys, followed closely by SanDisk ($322.4 million). Other favorites included Alphabet, Micron, and Tesla. Interestingly, while hardware and semiconductor firms saw massive inflows, software companies that suffered the steepest declines did not crack the top 50 list, suggesting investors are prioritizing tangible hardware over speculative software valuations.
A Pivot to Precious Metals
Beyond the tech sector, a significant trend emerged in the commodities space. Eight of the top 50 net-purchased items were related to gold, silver, and platinum.
The iShares Silver Trust (SLV) and the MicroSectors Gold Miners 3X Leveraged ETN (GDXU) saw heavy inflows. This diversification suggests that while "Ant" investors are aggressive, they are also wary of currency devaluation and potential inflation.
"The demand for safe-haven assets and inflation hedges against a weakening dollar will continue to support precious metal prices," said Hwang Byung-chan, a researcher at NH Investment & Securities. "The structural drivers that have been pushing these prices higher remain intact despite the short-term volatility in the equity markets."
The Risks of the "Bull Run" Mentality
While the "Seohak Gaemi" have historically profited from buying the dip, financial authorities in Seoul remain cautious. Leveraged ETFs are designed for daily trading, and the "volatility decay" inherent in these products can lead to significant losses if the market moves sideways or experiences prolonged downturns.
As the U.S. market enters a period of transition under a new Fed leadership, the billion-dollar bet by Korean investors serves as a litmus test for the resilience of the global retail trading phenomenon. For now, the "Ants" are doubling down on the belief that every correction is merely a prelude to a new high.
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