Korean investors, known as 'Seohakgaemi,' have shifted to net selling of U.S. stocks despite a decline in the exchange rate. The won-dollar exchange rate fell below 1,400 won, creating a favorable environment for U.S. stock investments. However, growing caution about further gains in the U.S. market has led to profit-taking actions. Notably, there was a significant sell-off of leveraged exchange-traded funds (ETFs) that invest in U.S. semiconductor stocks, resulting in sales exceeding purchases.
According to the Korea Securities Depository's securities information portal, Saveuro, domestic investors bought $6.4 billion worth of U.S. stocks and sold $6.5 billion from September 1 to 11. This resulted in a net selling amount of $13.1 million (approximately 1.8 billion won).
In contrast to a net purchase of $207.3 million during the same period last month, investor sentiment has shifted significantly. With about a third of September already passed, the trend of net selling could continue for the month.
Previously, Seohakgaemi had steadily increased their investments in the U.S. market. In June, they recorded a net purchase of $632.9 million in U.S. stocks, followed by net purchases of $4.6 billion in July and $1.9 billion in August.
Recently, the decline in the exchange rate has been seen as a favorable factor for U.S. stock investments. The won-dollar exchange rate, which had exceeded 1,500 won, fell below 1,400 won since mid-August, allowing domestic investors to purchase dollar-denominated assets at a lower cost in won.
Up until early this month, Seohakgaemi's buying momentum continued. From September 1 to 4, domestic investors net purchased $535.6 million in U.S. stocks. However, the mood shifted dramatically from September 7 to 11, when the amount of U.S. stock sales exceeded purchases by $666.1 million, reversing the earlier net buying.
The top purchased stocks indicate a preference for short-term safe assets. From September 1 to 11, domestic investors net purchased $129.8 million in the ETF 'SGOV,' which invests in U.S. short-term treasury bonds with maturities of three months or less. They also net purchased $93.8 million in quantum computing company IonQ and $73.3 million in Alphabet.
Conversely, the overall selling trend was driven by leveraged products related to U.S. semiconductor stocks. There was a large-scale net sell-off of 'SOXL,' which tracks the daily returns of the Philadelphia Semiconductor Index at three times the rate. From September 1 to 11, domestic investors net sold $677.4 million of SOXL, amounting to approximately 910 billion won. The trading pattern changed rapidly; from September 1 to 4, they net purchased $430.9 million of SOXL, but from September 7 to 11, they net sold a staggering $1.1 billion.
Shinhan Investment Corp.'s research center noted, "With rising international oil prices due to heightened tensions in the Middle East, the stock market has shown weakness. Following the Producer Price Index (PPI) announcement, U.S. Treasury yields surged, leading to an increased allocation to defensive stocks in AI-focused portfolios."
* This article has been translated by AI.
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