During the holiday break when Korea's stock market takes a breather, the U.S. stocks most loved by individual investors were found to be "leveraged ETFs (exchange-traded funds)." This suggests that domestic investors who briefly moved away from the local market to overseas stocks are pursuing aggressive strategies in search of big returns in a short period. It appears this is because leveraged investing suits the brief holiday window of just a few days.
Because it is a time when relatives gather and the U.S. stock market has risen steadily in recent years, it may also reflect a more aggressive pattern driven by FOMO (fear of missing out).
On 6th, NH Investment & Securities analyzed trading data of investors using its HTS and MTS during Lunar New Year and Chuseok holidays from 2022 through this year and found that the most-traded items during these periods were leveraged ETFs such as SOXL and SOXS. While these tickers appear among the top annual buys, they show even higher preference during holiday breaks.
During the 2022 Lunar New Year holiday (Jan. 31–Feb. 2), TQQQ, which tracks the Nasdaq-100's moves at 3 times, ranked first with a transaction amount of 31.3 billion won. SOXL, which provides 3-times exposure to the Philadelphia Semiconductor Index, ranked third, and SQQQ, which inversely tracks the Nasdaq-100 at 3 times, ranked fourth. During the 2022 Chuseok holiday (Sept. 9–12), SQQQ, SOXL, and TQQQ placed first through third in that order. SOXS, which inversely tracks the Philadelphia Semiconductor Index at 3 times, was tallied in fifth place.
In the following year, 2023 Lunar New Year (Jan. 23–24) and Chuseok (Sept. 28–Oct. 3), the top four were all swept by SOXS, SOXL, SQQQ, and TQQQ.
However, during last year's Lunar New Year holiday (Feb. 9–12), a somewhat different pattern emerged. SOXL, also a leveraged ETF, took first place, but second was Beamer Imaging (BMR), an Israeli autonomous driving company, third was Tesla, fourth was Nvidia, and fifth was ARM—individual stocks.
However, during Chuseok, leveraged ETFs again ranked among the most traded. During last year's Chuseok holiday (Sept. 16–18), the top three buys among individual investors were SOXL, SOXS, and TSLL, with NVDL in fifth. TSLL and NVDL are products that provide 2-times exposure to the share price moves of Tesla and Nvidia, respectively. During this year's Lunar New Year holiday (Jan. 27–30), Nvidia took first place, but leveraged ETFs dominated the upper ranks, including second-place SOXL, third-place NVDL, and fifth-place TSLL.
Individual investors appear to show an aggressive bent during holiday breaks to generate high revenue over the short break. With no burden of going to work the next day, the environment also allows for more active trading.
The "FOMO (fear of missing out)" effect may also be at work. FOMO refers to an excessive fear of falling behind others. Meeting relatives for the first time in a while and talking about investing can strengthen the tendency to seek bigger revenue.
An official at a financial investment firm said, "Holiday breaks present multiple factors that increase investment aggressiveness, such as a limited time window and hearing new information from others," adding, "Put differently, it is also a time with a high likelihood of losses, so it is necessary to consider a stable investment strategy in line with external changes."