Preference for Leveraged Products Leads to Greater Losses in Downturn
Recently, the stock prices of major U.S. tech stocks such as Tesla and Nvidia have declined, triggering alarm bells in the investment accounts of foreign investors. In particular, investors in their 20s and 30s, who have a high preference for leveraged products, have been confirmed to record returns below the average.
On the 11th, Kakao Pay Securities revealed the investment trends of users who traded U.S. stocks on its platform during February this year. Among the top 10 stocks by purchase amount during the period, the number one was the Tesla 2x Leverage ETF (Exchange Traded Fund·TSLL). Tesla and Nvidia ranked second and third respectively, showing continued strong interest in tech growth stocks.
Last month, the overall average return on U.S. stocks sold by Kakao Pay Securities users was 4.0%, down to less than half compared to January (8.7%).
Tesla fell 28% compared to January, but users concentrated their purchases on TSLL as well, aiming for a rebound. Nvidia also saw strong buying momentum, rising three places from the previous month to rank third.
Palantir’s rise was particularly notable. Reflecting growing interest in artificial intelligence (AI) and data analytics companies, Palantir newly entered the rankings, taking fourth place. On the other hand, Rigetti Computing, a quantum computing-related stock that led in January, dropped to sixth place, showing signs of a recent slowdown in its upward trend.
Looking at investment tendencies by age group, those in their 20s and 30s showed a marked preference for leveraged products. They actively purchased the Tesla 2x Leverage ETF and Nvidia 2x Leverage ETF (NVDL), with new entries including MGO Global and MicroAlgo. However, the average return for users in their 20s and 30s was 3.0%, lower than the overall average of 4.0%. This is analyzed to be due to higher volatility in returns caused by a larger proportion of leveraged investments.
Investors in their 40s and 50s tended to focus on individual stocks such as Tesla, Nvidia, and Palantir. Their average return was 5.0%, exceeding the overall average of 4.0%. This is attributed to a smaller proportion of leveraged investments and the selection of relatively less volatile stocks.
Kakao Pay Securities analyzed, "The investment trend in February can be summarized as expectations for a rebound in tech growth stocks and increased use of leveraged products. In particular, despite Tesla and TSLL falling 28% and 50% respectively, the continued buying momentum reflects investors’ optimistic sentiment who see future growth potential and aim to buy at low prices even during a correction phase."
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