South Korean retail investors net bought $4.5 billion worth of U.S. stocks in July, with $840 million flowing into SK Hynix American Depositary Receipts.

South Korean retail investors are flocking to the U.S. market to avoid local market adjustments, even as global investors pour into the South Korean market. Data shows that South Korean retail investors were net sellers of domestic stocks for most of last week, while foreign investors turned to net buyers. Of the $4.5 billion in U.S. stocks net purchased in July, approximately $840 million was invested in SK Hynix's American Depositary Receipts (ADRs), despite investors being able to buy the company's shares directly in South Korea. Owen Lamont, Senior Vice President at Acadian Asset Management, noted that SK Hynix ADRs have recently traded at a premium of about 10% to their South Korean counterparts and exhibit greater volatility. He called this behavior "absolutely insane" and considered the price discrepancy a warning sign of excessive speculation. Additionally, leveraged products are popular among South Korean investors, with four of the top U.S. stocks by net purchases in July being leveraged products, among which the Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL) was the most popular.