Surging ETF Investments by Korean Retail Investors and Market Dynamics
There is a notable increase in the investment of exchange-traded funds (ETFs) by South Korean individual investors in the stock market. Retail investors are shifting their preference from individual stock picks to ETFs, which align with market direction, influenced by capital flow into the equity market due to real estate regulation and declining deposit rates.
Since June this year, financial investment demand is interpreted through the lens of individual ETF purchases, and with the KOSPI index hitting an all-time high, there is a significant inflow of funds into domestic equity ETFs. The rising popularity of major semiconductor stocks like Samsung Electronics and SK Hynix has boosted related ETF inflows, leading domestic equity ETFs to attract more funds than their overseas counterparts.
Concurrently, investors are also showing interest in leveraged ETFs listed on the Hong Kong Stock Exchange, anticipating SK Hynix's stock rise. Experts point out that the interest aligns with SK Hynix’s critical position and potential growth in the AI semiconductor market. Both Citigroup and IBK Investment & Securities have revised their target prices for SK Hynix upward, indicating a positive outlook.
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