How U.S. Retail Investors Are Buying Korean Stocks Now — EWY, SK Hynix, HPSP, LS Electric

{"time":1778158828386,"blocks":[{"id":"b0","type":"paragraph","data":{"text":"HBM, semiconductor supply chain, power infrastructure... 'Hynix has risen less than Micron' thesis gaining traction"}},{"id":"b1","type":"delimiter","data":{}},{"id":"b2","type":"paragraph","data":{"text":"On May 4, foreign investors executed a single-day net buy of $2.1B in KOSPI stocks—the second-largest daily inflow on record—driving a 5% rally. A substantial portion came from U.S. retail investors gaining access to Korean markets for the first time following the Interactive Brokers (IBKR) launch."}},{"id":"b3","type":"paragraph","data":{"text":"Starting July 2026, the omnibus account system fully opens, allowing U.S. retail investors to trade Korean stocks 24/7 directly through their U.S. brokerage accounts. What stocks and ETFs are they buying now, and why?"}},{"id":"b4","type":"delimiter","data":{}},{"id":"b5","type":"header","data":{"text":"Three Reasons U.S. Retail Investors Are Drawn to Korean Stocks","level":2}},{"id":"b6","type":"paragraph","data":{"text":"First, the AI theme. HBM demand stems from the same AI infrastructure buildout in both the U.S. and Korea. Micron, listed on NASDAQ, has already rallied significantly. SK Hynix has higher HBM market share but has been harder to access, resulting in relative underperformance. This is the most cited thesis on Reddit and X."}},{"id":"b7","type":"paragraph","data":{"text":"Second, valuation discount. Many KOSPI-listed companies still trade below 1.0x price-to-book ratio. Government valuation improvement policies are helping narrow this discount."}},{"id":"b8","type":"paragraph","data":{"text":"Third, Korean won upside bet. Buying Korean stocks in dollar terms offers currency appreciation upside when the won strengthens."}},{"id":"b9","type":"delimiter","data":{}},{"id":"b10","type":"header","data":{"text":"Individual Stocks — Three Thematic Buckets","level":2}},{"id":"b11","type":"paragraph","data":{"text":"Large-cap semiconductors: SK Hynix dominates Reddit and X discussions. Samsung Electronics is also on the initial buy list."}},{"id":"b12","type":"paragraph","data":{"text":"Semiconductor supply chain: HPSP (high-pressure annealing equipment monopoly), Wonik IPS (CVD equipment), Jusung Engineering (ALD equipment), and PSK (photoresist removal equipment) are positioned as secondary beneficiaries of expanding foreign demand."}},{"id":"b13","type":"paragraph","data":{"text":"Power infrastructure: LS Electric, Daehwa Electric Wire & Cable, Iljin Electric, and Gaon Electric represent the Korean equivalent of the AI power bottleneck theme. The same structural logic driving gains in U.S. names like Eaton (ETN) and Vertiv (VRT) applies here."}},{"id":"b14","type":"delimiter","data":{}},{"id":"b15","type":"header","data":{"text":"ETFs — Easier Access for Risk-Averse Investors","level":2}},{"id":"b16","type":"paragraph","data":{"text":"Individual stocks carry high volatility and involve cumbersome account setup and currency conversion. ETFs provide a simpler entry route."}},{"id":"b17","type":"paragraph","data":{"text":"EWY (iShares MSCI South Korea ETF) is the de facto standard Korean ETF. Listed on the NYSE, it trades in dollars and can be purchased directly from any U.S. brokerage account. Holdings include major KOSPI components: Samsung Electronics, SK Hynix, Samsung SDI, Hyundai Motor, and LG Energy Solution. With roughly $5.0B in assets under management, it is by far the largest Korea-focused ETF. However, Samsung Electronics comprises approximately 22% of the fund, creating significant concentration risk."}},{"id":"b18","type":"paragraph","data":{"text":"FLKR (Franklin FTSE South Korea ETF) carries lower expense ratios than EWY (0.09% annually vs. EWY's 0.57%). It also holds a broader set of underlying stocks, providing better diversification. However, lower trading volume means liquidity verification is necessary before large purchases."}},{"id":"b19","type":"paragraph","data":{"text":"Domestic Korean-listed ETFs are also options. KODEX 200 (069500) is South Korea's largest ETF, tracking the KOSPI 200 index. TIGER Semiconductor (091230) and KODEX Semiconductor (091160) concentrate on semiconductor players including Samsung Electronics, SK Hynix, and Hanmi Semiconductor. For AI data center power infrastructure focus, themed ETF options like KODEX Power Infrastructure are available."}},{"id":"b20","type":"paragraph","data":{"text":"Valuation improvement-themed ETFs have recently launched. These funds track the government's valuation improvement index and have outperformed KOSPI by over 33 percentage points. They hold companies with low price-to-book ratios that are committing to increased dividends and share buybacks, offering a way to invest in the 'Korea discount' narrowing narrative."}},{"id":"b21","type":"delimiter","data":{}},{"id":"b22","type":"header","data":{"text":"U.S. Stocks vs. Korean Stocks — Comparative Matrix","level":2}},{"id":"b23","type":"table","data":{"withHeadings":true,"content":[["Theme","U.S. Comparable","Korean Comparable","Korean ETF"],["HBM & AI Memory","MU, NVDA","SK Hynix, Samsung Electronics","TIGER Semiconductor"],["Semiconductor Equipment","ASML, LRCX","HPSP, Wonik IPS","KODEX Semiconductor"],["Power Infrastructure","ETN, VRT","LS Electric, Daehwa Electric Wire & Cable","(Themed ETF)"],["Broad KOSPI","EWY","KODEX 200","TIGER KOSPI"],["Valuation Improvement","—","Low-PBR large-caps","Valuation Improvement Index ETF"]]}}]],"version":"2.28.2"}