The ‘firepower’ of Seohak Ant, which started investing in overseas stocks this year, is rapidly declining. This is because the US stock market, which had been upward sloping, faltered in the aftermath of interest rate hikes and inflation.
According to the Korea Securities Depository on the 17th, the number of overseas stocks Seohak Ants bought until the 13th of this year was $91.142 million (about 1.87 trillion won). It decreased by 60.1% from $2.285 billion (about 2.726 trillion won) in the same period last year. After the COVID-19 crisis, individual investors who opened their eyes to overseas stocks following domestic stocks net bought 26 trillion won worth of overseas stocks last year. This figure more than doubled the KOSDAQ net purchases (about 10.9 trillion won) last year.
Investing in overseas stocks, which was only unfamiliar to individual investors, drew attention from 2020 on the basis of high returns. As of the end of October, the Korea Economic Daily analyzed the returns (as of the end of October) of 1,010,000 Mirae Asset Securities customers (with a balance of 10 million won or more). appeared to be ahead. This is why they chose the Nasdaq instead of the KOSDAQ.
The atmosphere has changed this year. The Nasdaq, centered on technology stocks, which had been running without hesitation, fell 4.80% this year. Even the stocks held the most by the Seohak Ants also saw their yields plummet. Tesla, the No. 1 holding company in Seohak Ant, fell 0.68% in the new year. Domestic individual investors net sold about $2.83 million (about 3.4 billion won) this year as concerns about the weakness of growth technology stocks such as Tesla during the period of rising interest rates along with sluggish yields increased.
Shares of Nvidia and Apple, the second and third largest holdings, also fell by 8.39% and 2.53%, respectively, during the same period. Seohak Ants instead have steadily added Nvidia and Apple to their portfolios this year. The two stocks also ranked second and third in the most purchased stocks this year. Although the stock price is currently sluggish, it is a bet on long-term growth potential.
Investors who are accustomed to high returns are flocking to high-risk products that bet on ‘triple returns’ in order to raise returns that fall short of expectations. The number one net buying stock by Seohak Ants this year was the ‘ProShares Ultra Pro QQQ Exchange Traded Fund (ETF)’, which tracks three times the daily return of the Nasdaq 100 Index. The ‘Direction Daily Semiconductor Bull 3X SHS ETF’, which bets three times the growth rate of the US semiconductor index, also ranked fifth in net buying after Nvidia, Apple, and Microsoft.
This year’s reluctance to invest in China has been noticeable. Middle school ants (individual investors investing in China) net bought $1.3 billion worth of Chinese stocks this year. This is a drop of more than 90% compared to the same period last year ($14.6 billion). Lee Won-joo, a researcher at Kiwoom Securities, said, “It is a time to buy a sector that will benefit from inflation as the performance differentiation between large-cap stocks, small-cap stocks and sectors is intensifying. It will increase.”
By Park Jae-won wonderful@hankyung.com
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