Top Two Net-Bought Stocks in the U.S. Are Semiconductor ETFs... Seohak Ants Bet on a Rally

August Holdings Reach $185.6 Billion
From Leveraged Funds to Memory Chip ETFs
U.S. Bear Market Entry Considered Unlikely

It has been revealed that, over the past week, the top two stocks most purchased by Korean retail investors trading foreign equities were both semiconductor exchange-traded funds (ETFs). Ahead of NVIDIA’s earnings announcement—NVIDIA being a leading artificial intelligence (AI) stock—domestic investors appear to have bet on a rise in semiconductor stocks. This earnings report is considered a crucial indicator, not only for AI semiconductor demand, but also for assessing whether big tech companies will continue investing in their data centers.

According to SEIBro, the Korea Securities Depository’s securities information portal, on August 27, domestic investors made net purchases of $718.79 million in 'Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL)' on the U.S. stock market between August 19 and 25. SOXL is a high-risk leveraged product that tracks three times the daily return of the Philadelphia Semiconductor Index. Next, the 'Roundhill Memory ETF (DRAM),' which focuses on major memory companies, ranked second with net purchases of $80.84 million.

Alphabet was fourth with $51.78 million, while the 'Invesco NASDAQ 100 ETF (QQQM),' which tracks the Nasdaq 100 Index, ranked sixth with $41.61 million in net purchases. SanDisk came tenth with $34.98 million, Broadcom was twelfth with $32.64 million, and the 'Roundhill T-REX 2X Long DRAM Daily Target ETF (RAM),' which seeks to achieve twice the daily returns of memory semiconductor companies, ranked fifteenth at $25.14 million in net purchases.

This year, the amount of U.S. equities held by domestic investors has been on the rise. According to the Korea Securities Depository, the value of U.S. stock holdings climbed sharply from about $168 billion in January to $204.1 billion in May. As of August 24, it has been maintained at around $185.6 billion.

There are opinions that the likelihood of the U.S. stock market entering a bear market within the next 6 to 12 months due to macroeconomic factors is slim. Samsung Securities assessed that the U.S. economy has remained in an expansion phase since May 2020, and, barring a forced tightening by the central bank, is expected to continue its robust trajectory.

Samsung Securities also noted that the recent rise in long-term U.S. interest rates is likely to be temporary and limited in risk. While geopolitical uncertainties related to Iran have persisted, they analyzed that recent interest rate increases were driven more by upward revisions in growth projections than by the effects of war. As a result, expectations for inflation remain stable, making it unlikely for the U.S. 10-year Treasury yield to exceed 4.6–4.7% in the second half of the year.

Yoo Seungmin, researcher at Samsung Securities, said, “The lesson learned in the high interest rate environment since 2022 is that it is not a structural weakness for growth stocks, but rather that share prices of companies with earnings growth sufficient to offset the burden of interest rates remain resilient. If the strength of earnings growth significantly exceeds the average, concerns about interest rates can be sufficiently absorbed.” He added, “We maintain a preference for the IT and semiconductor sectors, which are expected to continue delivering exceptional earnings growth through next year. It is advisable to gradually increase allocation to sectors with strong earnings momentum by taking advantage of market volatility.”

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