Foreign Retail Investors Net Buy 4 Trillion Won in One Month... Betting on 3x Leverage

Foreign Retail Investors' Bargain Buying... 81% Increase Compared to Same Period Last Year
TQQQ Down About 40% in One Month... 83% Down Since the Beginning of the Year

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] 'Seohak Gaemi' investors who invest in overseas stocks have purchased a net amount worth 4 trillion won over the past month despite the recent sharp decline in the US stock market.

According to the Korea Securities Depository's securities information portal on the 15th, the net purchase settlement amount of US stocks by domestic investors over the past month from the 12th of last month to the 12th of this month was $2.99927 billion (approximately 3.8504 trillion won).

This amount is 81% higher than the same period last year ($1.65321 billion, approximately 2.1218 trillion won). It is also higher than the monthly average from January to April this year ($2.40377 billion).

In the US New York stock market, over the past month until the 12th of this month, the Nasdaq index fell about 15%, the S&P 500 fell 10.6%, and the Dow Jones Industrial Average fell 7.3%.

[Image source=Yonhap News]

The S&P 500 index has fallen 18.44% from its peak, approaching a bear market, and the Nasdaq index has plunged about 30% from its peak.

Domestic investors appear to have responded with bargain buying, anticipating a high possibility of a rebound despite the weak market.

In particular, many leveraged ETPs (Exchange-Traded Products/Exchange-Traded Securities) that track three times the return of the underlying index ranked within the top 10 purchases.

The ProShares UltraPro QQQ ETF (TQQQ), which tracks three times the return of the Nasdaq 100 index ($631.15 million), ranked second among all stocks, and the Direxion Daily Semiconductors Bull 3X Shares ETF, which tracks three times the Philadelphia Semiconductor Index ($405.4 million), ranked third.

The 'BMO Micro-Sector FANG+ Index 3X Leveraged ETN' ($66.94 million), which tracks three times the price of 10 US tech stocks, ranked eighth, and the 'BMO Micro-Sector FANG Innovation 3X Leveraged ETN,' which tracks three times the price of 15 US tech stocks, ranked ninth.

Meanwhile, TQQQ fell about 40% over the past month and has dropped 83% compared to the beginning of the year.