Are You Disappearing in the Gunfire? Seohak Ants Bet Trillions

Unstoppable Ants
Proshare UltraPro 670 Billion
Top Net Buyer Despite High Investment Risk

Also Heavily Accumulating Tech Stocks
Tesla, Apple, Alphabet Included

Commodity Surge and Corporate Earnings Decline
Fed Hawkishness Amid Inflation
Uncertain Success in Overseas Stock Investments

[Asia Economy Reporter Minji Lee]"ProShares UltraPro QQQ ETF", "3x", "High Risk High Return"

Following the Donghak ants, Seohak ants (individual investors directly investing in overseas stocks) have also seized the crisis as an opportunity and engaged in speculative betting.

According to the Korea Securities Depository's information system SaveRo on the 17th, from the 17th of last month until the day before, the most purchased stock by overseas direct stock buyers was the "ProShares UltraPro QQQ Exchange-Traded Fund (ETF)." They net bought a total of 670.4 billion KRW. This ETF is based on the Nasdaq 100 index and can yield triple profits when the market rises, but it also falls threefold when the market declines, making it a highly risky investment.

As Nasdaq slipped, Seohak ants sensed this as an opportunity and flocked in. The Nasdaq market has been sluggish after a sharp drop due to the hawkish stance of the U.S. Federal Reserve (Fed). It has fallen about 14% since the beginning of the year. The ProShares UltraPro QQQ ETF dropped about 39% during this period.

The "Direxion Daily Semiconductor 3x ETF," which bets on the rise of the Philadelphia Semiconductor Index aiming for triple returns, also attracted funds worth 282.5 billion KRW. The "BMO MicroSectors FANG Innovation 3x ETN" (67 billion KRW), which includes 15 U.S. tech stocks such as FANG (Facebook, Amazon, Apple, Netflix, Google), and the "BMO MicroSectors FANG+ 3x ETN" (57.3 billion KRW), which invests in 10 global tech innovation companies including FANG, were also purchased in significant amounts.

Besides these, investors also heavily bought tech stocks, judging it an opportunity to acquire quality stocks at a low price. Tesla, which has been the most favored by Seohak ants, saw accumulation worth 623.9 billion KRW. Apple (292.8 billion KRW), Alphabet (223.7 billion KRW), and Nvidia (177.5 billion KRW) were also purchased.

Whether Seohak ants' bets will end successfully remains uncertain. Concerns are growing that corporate earnings may decline due to rising raw material prices linked to Russia's invasion of Ukraine. There is also a possibility that the Fed may adopt a more hawkish stance to reduce inflationary pressures.

Baek Yun-min, a researcher at Kyobo Securities, explained, "The key to the Fed's monetary policy decision is inflation," adding, "Although inflation is expected to decline in the second half of the year, it may still remain at a high level, so the Fed has indicated a willingness to raise interest rates more quickly if necessary." If the market deviates from expectations, a sharp index drop like at the beginning of this year could recur.

As global stock market uncertainty may increase, experts advise caution when investing in products that could lead to significant losses. They also emphasize that compared to domestic stocks, timely information acquisition is difficult, and unexpected geopolitical risks could cause extreme exchange rate fluctuations. Kim Han-su, a research fellow at the Korea Capital Market Institute, said, "While convenience for overseas stock investment is increasing, demand for speculative products not permitted under domestic law is rising among individual investors," adding, "Since domestic investor protection provisions do not apply, deep caution is needed regarding aggressive investment behaviors."

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