TLDR:South Korean retail investors bought $4.6B of U.S. stocks in July, a 627% jump from June’s $633M total.The KOSPI remained about 33% below its June peak by Aug. 7 after posting its worst monthly fall since 2008.Samsung and SK Hynix drove about 76% of the KOSPI’s 2,257.8 trillion won market-value decline during the rout.Leveraged ETFs tied to Samsung and SK Hynix shrank from $50B to $17B, while Citi estimated $38.7B in losses.South Korean retail investors returned to U.S. stocks in July as a historic KOSPI selloff weakened confidence in domestic equities. Korea Securities Depository data showed net purchases reached $4.6 billion, the highest level in six months and above June’s $633 million.South Korean retail investors are turning to US stocks amid domestic market turmoil:Retail investors from South Korea bought +$4.6 billion worth of US stocks in July, the largest monthly total since January 2026.This marks a +627% MoM increase and follows -$469 million and… pic.twitter.com/g2s0bBBUiL— The Kobeissi Letter (@KobeissiLetter) August 8, 2026That total represented a 627% monthly increase and exceeded the $2.7 billion monthly average recorded in 2025. It also marked the first month since February when U.S. stocks attracted more retail buying than Korean shares.KOSPI Rout Sends Retail Investors Back to U.S. StocksThe move reversed an earlier pattern seen in April and May, when South Korean investors were net sellers of American equities. During that period, enthusiasm around domestic governance reforms had helped pull retail capital back toward the home market.By July, however, the backdrop had changed dramatically. The KOSPI remained about 33% below its June peak by August 7 after suffering its worst monthly performance since 2008.The pressure intensified late in the month. On July 28, the index dropped 10.84% in one session, while SK Hynix fell 14.7% and Samsung Electronics declined 14.4%.Those two companies were central to the broader market damage. Together, Samsung and SK Hynix accounted for about 76% of the KOSPI’s 2,257.8 trillion won market-value decline.That loss was equivalent to roughly $1.59 trillion. The slide followed concerns over slower AI investment growth and increasing competition from Chinese memory-chip producers.Leverage then deepened the damage. Retail investors had previously poured money into single-stock leveraged ETFs linked to Samsung and SK Hynix during the market rally.Such products magnify daily moves and can force additional selling when prices fall. Consequently, assets in those leveraged funds fell from about $50 billion in June to $17 billion by late July.Moreover, Citi estimated retail losses from the leveraged ETF trade at $38.7 billion. That scale of losses added another pressure point for households already exposed to falling domestic shares.Seoul’s Re-Shoring Push Weakens as Domestic Cash FallsIn addition, authorities introduced Re-shoring Investment Accounts, which offer tax incentives to investors who sell overseas assets and redirect the proceeds into domestic markets. However, the policy lost momentum in July, when deposits in those accounts declined for the first time.At the same time, cash held in local stock-trading accounts also fell sharply. Domestic trading balances dropped from about 140 trillion won in early June to 102.8 trillion won by early August, reinforcing the shift seen in retail allocation data.The consequences also extend beyond the equity market, as overseas purchases require investors to exchange won for dollars. As a result, sustained demand for foreign assets can increase demand for U.S. currency alongside continued capital outflows.For retail investors, July therefore marked a clear change in allocation strategy. After several months of renewed interest in domestic equities, the KOSPI rout redirected significant capital toward U.S. stocks.Consequently, the $4.6 billion in July purchases highlighted how quickly investor preferences changed as losses deepened across South Korea’s largest listed companies and leveraged investment products.The post South Korean Retail Investors Pour $4.6 Billion Into U.S. Stocks as KOSPI Rout Deepens appeared first on Blockonomi.