Wallets Open Wide on Big News...300 Trillion Won Heads to the U.S., "Tax Breaks" Fail to Keep Funds at Home

Concentrated Buying of Intel and Other Tech Stocks During the Rally
Strong Demand for U.S. ETFs Holding Samsung Electronics and SK hynix

The number of Korean individual investors putting money into U.S. stocks is once again rising rapidly.

According to Yonhap News and the Korea Securities Depository’s securities information portal SEIBro on May 17, as of May 14, the total value of U.S. stocks held in custody stood at $200.1375 billion (approximately 300.2703 trillion won). The custodial amount refers to the value of foreign securities purchased by domestic residents and deposited with the Korea Securities Depository, and the amount of U.S. stocks in custody reflects the total U.S. stock holdings by domestic investors.

Previously, President Lee Jaemyung emphasized his commitment to boosting the domestic stock market in a meeting with securities company executives in September last year. Following this, in March, domestic securities firms introduced the "Return Investment Account" (RIA), which temporarily offers tax benefits to investors who repatriate funds from overseas stock sales into the domestic market and commit to long-term investment. In addition, the National Assembly passed a bipartisan revision of the Restriction of Special Taxation Act, allowing Korean investors in overseas stocks to receive up to a 100% exemption on capital gains tax if they return to the domestic stock market by May.

Due to these stock market support policies, the amount of U.S. stocks held in custody, which was $167.48 billion at the beginning of the year, fell to $146.57 billion by the end of March. However, as Korean investors (so-called "Seohak Ants") responded to a rally in U.S. big tech stocks by heavily buying major tech shares such as Intel, the net selling trend reversed sharply last month, marking the fastest narrowing of net selling in 10 months. From last month, U.S. stock holdings began to increase again, surpassing $200 billion for the first time on May 11, dipping to $195.4 billion on May 12, and then exceeding the $200 billion mark once more on May 14.

Over the past month, Intel was the top stock among U.S. equities purchased by Korean investors, with net purchase settlements amounting to $641.12 million (about 961.68 billion won), spurred by news that Intel had secured a semiconductor manufacturing contract for Apple’s next-generation devices. Micron and Alphabet also ranked high, placing fourth and sixth, respectively.

The "Roundhill Memory" ETF, which invests more than half of its assets in Samsung Electronics and SK hynix, and the "Invesco Nasdaq 100" ETF, which tracks the Nasdaq 100 index, claimed the second and third spots, respectively. With expectations that demand for artificial intelligence (AI) will continue to grow and the semiconductor rally ongoing, experts anticipate that Korean investors’ interest in U.S. stocks is likely to persist for the time being.

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