Retail Investors Turn to 3x Overseas Leverage ETFs Despite Domestic Restrictions

As the government raised investment barriers for domestic single-stock leverage products, funds have reportedly flowed into overseas leverage ETFs.

According to the Korea Securities Depository, SOXL was the most purchased U.S. stock by "Seohak ants" (Korean retail investors investing overseas) from July 16, when the government announced measures regarding single-stock leverage products, to August 3.

The trading volume for SOXL purchases reached $4,636,170,000, which was more than seven times larger than Micron Technology, the second most purchased stock.

SOXL is a leverage ETF that tracks the price fluctuations of U.S. semiconductor companies threefold.

During this period, three of the top ten U.S. stocks purchased by Seohak ants were leverage ETFs: SOXL, an ETF tracking the KOSPI return threefold (KORU), and a leverage ETF tracking Tesla's stock price twofold (TSLL).

The total purchase trading volume for these three leverage ETFs stood at $5,174,400,000, an increase of more than $1 billion compared to the previous 13 trading sessions.

Even on July 31, the first day the 30 million won basic deposit requirement for trading single-stock leverage products took effect, SOXL remained the most purchased U.S. stock by Seohak ants, with a purchase trading volume of $498,420,000.

The second place went to the KOSPI 3x tracking ETF (KORU), and the proportion of these two leverage ETFs' purchase volumes among the top 10 purchased products reached 80.2%.

In contrast, the purchase trading volume of domestic single-stock leverage products has plummeted following the implementation of the measures.

On July 30, the purchase trading volumes of 16 domestic single-stock leverage products by individual and foreign investors stood at 5,543,100,000,000 won and 4,858,800,000,000 won, respectively. However, after trading barriers were raised, the trading volumes for individuals and foreigners dropped to 309,200,000,000 won and 488,000,000,000 won, respectively, on August 4.

Analyzing this phenomenon, experts noted that as regulations on domestic single-stock leverage products take full effect, funds are noticeably shifting toward overseas leverage ETFs.

Reported by Kim Minjeong | Video by Choi Gang-san | Graphics by Yook Do-hyun | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.