Increase in High-Leverage ETF Investments Among Korean Investors
Despite concerns over a potential U.S. recession, Korean individual investors are actively investing in high-leverage Exchange Traded Funds (ETFs). Over the past week, the Direxion Daily Semiconductor 3X Bull ETF and GraniteShares 2X Long Nvidia ETF were net purchased to the tune of $94.495 million and $31.349 million, respectively. This reflects an expectation of a rebound in artificial intelligence (AI) semiconductors. However, experts warn that these high-leverage products are significantly risky.
Additionally, the Invesco QQQ Trust, which tracks the Nasdaq 100 index, and Schwab U.S. Dividend Equity ETFs are also popular choices among investors. Domestic high-skill investors are concentrating their bets on Tesla and semiconductor-related stocks while selling major tech stocks. The Direxion Daily Tesla Bull 2X Shares ETF, which aims for double the returns on Tesla stock, and GraniteShares Trust 2X Long Nvidia Daily ETF have seen substantial buying activity.
On the other hand, the insurance company Chubb has been a primary sell-off target, likely for profit-taking purposes. Major tech stocks have been on a downward trend recently due to deteriorating employment metrics and the anticipation of interest rate cuts.
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Despite U.S. stock market slump... Retail investors bet 3 times on semiconductors - EdailyAmid fears of a U.S. economic recession and a sharp decline in global stock markets, it appears that Korean retail investors are flocking to high-leverage exchange-traded funds (ETFs). This strategy can be interpreted as a willingness to take risks to recoup losses and maximize returns. However, as high-leverage ETFs have high expected returns...