Underage stock investors surge with decent gains in Korea

The number of investors under age 18 is rising in South Korea, posting even higher gains from their stock purchases than adults.

According to 10 domestic stock brokerage firms, including Daishin Securities Co. and Kiwoom Securities Co. on Tuesday, teenage and younger investors have opened slightly more than 480,300 new stock trading accounts in the first half of this year.

The figure is higher than 475,399 such accounts opened by young investors for the entire 2020 tallied by the financial regulator, the Financial Supervisory Service.

Accumulated stock trading accounts held by minors at the 10 brokerages reached 1.16 million, surpassing the 1 million mark for the first time in the country.

The size of stock assets run by young investors has also increased significantly.

According to KB Securities Co., stock accounts held by juniors increased to 610 billion won ($531 million) at the end of June, up 225% from 190 billion won at the end of 2019.

Stock accounts held by retail investors of all ages rose 94% to 82.2 trillion won from 42.4 trillion won in the same period.

SMARTER LONG-TERM INVESTORS

Industry watchers attributed the rising number of minor stock investors to not only the recent bull run from the pandemic-hit market but also a shift in their parents’ attitudes toward stock investments as a way of teaching finance and economy, rather than a “risky gamble.”

“Successful stock investment experiences from participating in recent initial public offerings have contributed to creating an environment for even minors to jump into the stock market,” said Samsung Securities analyst Jeong Myeong-ji.

Some individual investors, even using their kids’ accounts, have gone all out to get as many IPO stocks as possible when a promising company goes public, industry officials said.

Wealth inheritance through equities is another reason for the rise in the number of minors’ stock accounts.

According to the National Tax Service, reported inheritance through securities and other financial assets from parents to their offspring reached a record high of 12.87 trillion won at the end of 2020.

In many cases, underage investors are smarter than investors of other age groups in terms of returns.

Returns on investment in stocks, bonds and funds by people under the age of 18 at 4.25 million brokerage accounts at NH Investment & Securities in the first half were 11.12%, higher than 7.13% for those in their 20s and 7.23% for 30s.

The rookie investors largely pursued “value investing” in blue-chip shares such as Samsung Electronics Co., Hyundai Motor Co., Kakao Corp. and Naver Corp. and held the stocks for longer than adult investors, according to NH.

Write to Jae-Won Park and Hyung-gyo Seo at wonderful@hankyung.com
In-Soo Nam edited this article.