As Kospi Plunges, Where Are Retail Investors Flocking? "Surged Fourfold This Month"

[Anchor]

Clear signs of investors pulling out are emerging from the domestic stock market, which has been gripped by extreme volatility. Meanwhile, enthusiasm for investing in U.S. stocks has grown even hotter this month.

Reporter Lee Tae-gwon explores the background behind these contrasting investment trends in Money Move.

[Reporter]

This month, market stabilization measures have been triggered almost every day in the Kospi, including two circuit breakers and 12 sidecars.

Amid extreme volatility, the index has plummeted 26% from its peak recorded a month ago.

Deposits from domestic investors, which serve as waiting funds for the stock market, also shrank by more than 30 trillion won, dropping to the 105 trillion won range. Amid a mood of rising interest rates, the time deposit balances of the top five commercial banks increased by 22.3 trillion won this month.

[Chun Young-jae / Seongnam-si, Gyeonggi Province: "(The domestic stock market) has too much volatility, making it unpredictable, and the scale at which news gets reflected is just too massive. It became too scary to continue."]

The scale of U.S. stock investments by domestic investors is increasing once again.

While net selling prevailed in April and May, it shifted to net buying last month. Entering this month, as the won-dollar exchange rate began to decline, the volume surged to four times that of last month.

So-called Seohak ants (retail investors investing in overseas markets) most heavily bought leveraged ETFs tracking three times the daily return of the Philadelphia Semiconductor Index, which is composed of semiconductor-related companies such as Nvidia and Micron, followed by SK Hynix ADRs.

Analysts suggest that as the domestic stock market recently plunged, investors poured into U.S. tech stocks in pursuit of higher returns, anticipating a rebound.

[Shin Seung-jin / Head of Investment Information Team, Samsung Securities: "(During the first half of the year,) the market was strong centering on memory semiconductors, so the incentive to invest in overseas U.S. stocks was relatively low. Recently, conversely, as domestic stocks have shown weakness, such disappointed funds likely moved overseas..."]

The Return to Domestic Market Account (RIA), which lowers capital gains tax rates for those who sell overseas stocks and invest in domestic ones, saw its growth momentum stall starting last month when the 100% tax exemption ended, and its balance has recently decreased.

Single-stock leveraged ETFs, introduced to prevent the outflow of domestic capital to foreign markets, are producing side effects of amplifying volatility.

Attention is focused on whether supplementary measures for single-stock leveraged ETFs, to be implemented at the end of this month, can reduce volatility and turn investors' steps back.

(Video Editing: Lee So-young, Design: Choi Jae-young)
※ Please note: This article was translated by AI and may contain errors.