Domestic Retail Investors Shift Back to U.S. Stocks
Domestic retail investors are once again casting a cold eye on the domestic stock market. U.S. stock investments, which had briefly stalled during the domestic market’s upward rally, are rapidly increasing again in August, pushing the custody balance back over $190 billion. In the exchange-traded fu
Recent reports reveal that domestic retail investors are returning to U.S. stocks. In August, U.S. stock investments surged, driving the custody balance surpassing $190 billion. Exchange-traded funds (ETFs) tracking major U.S. indices have also begun to dominate retail net purchases. As the domestic stock market experienced sharp fluctuations, retail investors appear to be gravitating back to the relatively lower volatility offered by major U.S. indices.
Some investors even purchased products that bet on a decline in domestic stock prices, indicating a rapid recovery of retail investors' interest in the domestic market. According to the Korea Securities Depository, the custody balance of U.S. stocks held by domestic investors rose to $190.2 billion by Aug. 17, marking a significant increase of over $18 billion from the $170 billion level at the end of July.
Although the balance had reached $204.2 billion at the end of May, it dropped to $194.8 billion by July, before recovering again in August. Market observers attribute the shift to the high volatility of the domestic stock market, with investors once again perceiving U.S. stocks as a "safe haven." While foreign investors continued to purchase U.S. stocks, retail investors showed a trend of selling off domestic stocks until recently.
However, they temporarily halted their "selling" streak and turned to a net purchase of $731.6 billion on Aug. 18. Recent supply and demand dynamics reveal that while foreign investors recorded net purchases for five consecutive trading days in the KOSPI market, retail investors sold off domestic stocks for four consecutive trading days before net purchasing again.
The ETF market also reflects the shift, with three out of the top five ETFs in retail net purchases tracking major U.S. indices. The enthusiasm of domestic investors for U.S. stock investments seems to be reviving, with many waiting for stock prices to return to their purchase levels rather than actively re-entering the market.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
