Korean investors pour $394mn into leveraged U.S. semiconductor ETFs

South Korean retail investors sharply increased their bets on U.S. semiconductor stocks last week, led by heavy buying of leveraged exchange-traded funds (ETFs) that trade chip stocks’ daily performance at three times the rate.

According to SEIBro, the securities information portal operated by the Korea Securities Depository, on Monday, Korean investors made the largest net purchases of the Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL) between October 5 and 9, which totaled $393.92 million on a settlement basis.

That was more than three times the $115.79 million invested in the second-ranked iShares 0-3 Month Treasury Bond ETF (SGOV).

SOXL is a high-risk product designed to deliver three times the daily returns of a U.S. semiconductor-related index.

The buying suggests investors are making aggressive bets on short-term rally in chip stocks.

Buying also extended to the broader semiconductor sector. The iShares Semiconductor ETF (SOXX) attracted $55.16 million in net purchases, ranking third overall. Combined net buying of SOXL and SOXX reached $449.08 million.

Individual chipmakers also drew strong demand.

Korean investors bought a net $45.29 million of Advanced Micro Devices Inc. (AMD), $34.36 million of Intel Corp., and $33.22 million of Taiwan Semiconductor Manufacturing Co. (TSMC).

The shift marks a change from late September, when Tesla Inc. led overseas net purchases at $59.28 million, followed by Sandisk Corp. at $54.2 million, and Meta Platforms Inc. at $44.73 million.

Last week’s buying points to growing demand for exposure to the semiconductor sector as a whole, rather than bets on individual companies alone.

Observers also noted that the trend may also reflect investors turning to U.S. markets as access to leveraged ETFs tracking Samsung Electronics Co. and SK hynix Inc. becomes more restricted in Korea.