With Tax Benefits Gone, Korean Retail Investors Flock to U.S. Semiconductor Stocks

U.S. Stock Holdings Near $200 Billion
Massive Shift to Triple-Leveraged Semiconductor ETFs
U.S. Market Seen as More Attractive Amid Modest Gains

As the 100% tax benefit period for the Domestic Market Return Account (RIA) has ended, Korean investors are once again turning their attention to the U.S. stock market. These so-called 'Seohak ants' are aggressively purchasing U.S. semiconductor triple-leveraged exchange-traded funds (ETFs), seeking high-risk, high-return opportunities.

According to the Korea Securities Depository on June 11, as of June 9, the total amount of U.S. stocks held by Korean investors reached 191.9 billion dollars. The value of U.S. stock holdings had decreased from 168 billion dollars in January this year to 154.2 billion dollars in March, immediately after the launch of RIA. However, it surged to 204.2 billion dollars in May and continues to remain high this month.

The main reason investors are heading back to the U.S. market is the expiration of the strong incentive previously offered by the government—the 100% deduction benefit of the RIA. The RIA system allowed investors to transfer overseas stocks held until December 23 of last year into a dedicated account, sell them, and reinvest in domestic stocks, with capital gains tax deductions depending on the return timing. Until last month, a 100% deduction was given upon return, which drops to 80% until the end of July and 50% until the end of the year. The maximum deduction limit is 50 million won per person, based on the amount of overseas stocks sold.

Settlement data for the past month (May 10 to June 9) shows that Seohak ants have been heavily buying U.S. semiconductor stocks. During this period, the top purchase by settlement amount was 'SOXL,' a triple-leveraged ETF tracking the Philadelphia Semiconductor Index. Investors poured a staggering 4.7 billion dollars into this single product. The ETF tracking Micron Technology's stock at double leverage (MUU) also saw a settlement amount exceeding 500 million dollars, ranking sixth. This indicates aggressive investment in the upward volatility of the semiconductor market.

Even among individual stocks, semiconductor purchases were overwhelming. Micron Technology, benefiting from the boom in memory semiconductors, ranked second overall with 1.4 billion dollars in purchases. Nvidia, the leading AI stock, followed with 700 million dollars. Additionally, Marvell Technology (600 million dollars), Intel (500 million dollars), Roundhill Memory ETF (400 million dollars), and Arm Holdings (300 million dollars) filled most of the top 10 purchased stocks, the majority of which were semiconductors. Among big tech (major IT companies), only Alphabet made it into the top ranks, with 400 million dollars in purchases.

Lee Hyoseop, a research fellow at the Korea Capital Market Institute, explained, "The increase in U.S. stock holdings is largely due to the perception that the domestic stock market has already risen significantly, while the U.S. market has risen less, fueling expectations for further gains. The end of the RIA 100% benefit also played a major role." He added, "There is a strong tendency toward semiconductors in the U.S. market as well, which is why there has been a rush to triple-leveraged semiconductor ETFs. Additional factors, such as the potential listing of SpaceX, are also contributing to increased investment demand."

This content was produced with the assistance of AI translation services.