South Korean investors continued to pour money into US leveraged exchange-traded funds (ETFs) this week, despite a market rout that has pushed stocks into correction territory. According to Bloomberg calculations from Korean depository data, retail investors from South Korea invested a net $519 million into three US leveraged ETFs between March 10 and 13. The investors also put $371 million directly into shares of Tesla Inc., which have seen wild fluctuations this week.
These bets highlight the risk-hungry nature of South Korea’s investor base and their continued faith in the US stock market, even as concerns about President Donald Trump’s disruptive trade policies weigh on sentiment. The Direxion Daily Semiconductors Bull 3x Shares ETF (SOXL) attracted $232 million of inflows from South Korea this week. An ETF seeking two times returns on Tesla’s daily move saw $181 million of demand, while the ProShares UltraPro QQQ (TQQQ) had an inflow of $106 million.
Leveraged ETFs, which amplify the returns and losses investors can get by directly buying stocks, have become popular among Korean investors for exposure to tech stocks. This trend has raised concerns among local regulators.
Korean money flows into leveraged ETFs
Retail investors in the US have also continued to buy this week, suggesting a divide between Wall Street and Main Street on the likely direction of stocks. The ongoing volatility in big tech stocks such as Tesla, Meta, and Alphabet has brought concern to many Western investors who have seen significant returns in recent years. In other news, Meritz Financial Group Vice Chairman Yongbum Kim is set to receive 83.27 billion won in remuneration, reflecting the financial sector’s profitability amid the dynamic economic environment.
The impeachment trial of President Yoon Suk Yeol continues to polarize opinions, with prominent figures like writer Rhyu Si-min making strong statements. A couple in eastern China with nine daughters expressed their desire for a son, highlighting ongoing cultural preferences in certain regions. Korean politicians have agreed to reform the national pension fund for the first time in 18 years, signaling a significant policy shift to address demographic challenges.
Police are investigating questionable financial activities by a Shinhan Bank employee, while residential developments like Jugong apartments in Haan-dong, Gwangmyeong-si, Gyeonggi-do, reflect South Korea’s robust real estate market. In entertainment, celebrities like Lee Si-an, singer Soyeon, and actresses Kim Hye-soo and Lim Soo-jung made public appearances and engaged with fans.
