[Edaily Reporter SEOK JI-HOEN ] Amid the recent sharp decline in the domestic stock market, retail investors are buying up U.S. stocks in large numbers. In the first week of November alone, net purchases of U.S. stocks approached 3 trillion won.

According to SaveRo, the securities information portal of the Korea Securities Depository, on the 7th, net purchases of U.S. stocks by domestic investors from the 2nd to the 6th (based on the date of inquiry) totaled $2,197,530,000 (approximately 2.982 trillion won). This figure exceeds the net purchase amount for the entire month of August ($1.96234 billion) and is more than double that of September ($1.00128 billion). In effect, they purchased approximately 40% of the net amount bought in the entire month of October ($5.42312 billion) in just one week.

While these retail investors net sold U.S. stocks worth $468.93 million and $939.77 million in April and May of this year, respectively, they returned to net buying in June. Since then, they have steadily increased their buying volume, recording the largest net purchase amount in 11 months last month.

The buying momentum in U.S. stocks stands out even when compared to the domestic stock market. During the same period, retail investors’ net purchases on the KOSPI totaled approximately 4.2 trillion won, narrowing the gap with the scale of net purchases of U.S. stocks. Amid the continued downturn in the domestic stock market, the fact that the won-dollar exchange rate has fallen to the mid-1,300 won range is also seen as having influenced overseas investment.

Buying activity in U.S. stocks was concentrated on high-risk leveraged products. The top net buyer this month was the exchange-traded fund (ETF) “Direxion Daily Semiconductor Bull 3X” (SOXL), which tracks the daily return of the U.S. semiconductor index by a factor of three.

Net purchases of SOXL totaled $1.62525 billion, accounting for approximately 74% of total net purchases of U.S. stocks. This was followed by Alphabet ($497.05 million) and “ProShares UltraPro QQQ” (TQQQ; $220.22 million), which tracks the daily returns of the Nasdaq 100 Index threefold.

Idle funds in the domestic stock market are on a downward trend. According to the Korea Financial Investment Association, investor deposits stood at 88.5338 trillion won as of the 5th, remaining below 100 trillion won since the 13th of last month. This indicates a decline in funds deposited in brokerage accounts for stock purchases.

The balance of margin loans—which indicates the amount of stock purchased with borrowed funds—was recorded at 28.7715 trillion won. Both investor deposits and the margin loan balance have been on a downward trend recently.