S.Korea’s retail investors put record amount in overseas stocks

South Korea’s retail investors poured 22.9 trillion won ($18.8 billion) into purchasing overseas stocks last year, according to the country's central bank.

The investment amount is the highest such figure since the Bank of Korea began collecting the data in 1965. The BOK announced Thursday that last year’s investment volume by retail investors renewed the record high seen the year prior at 20.6 trillion won. 

The rising appetite of Korea’s “ants,” the local nickname for retail investors, is in sharp contrast to the investor sentiment back in 2018 and 2019 when their overseas stock portfolio hovered just above 2 trillion won. 

PUSHED BY COVID

The economic downturn following the COVID-19 pandemic sparked interest in stock market investing among South Koreans, in addition to other means of supplementary income. 

The balance of their combined overseas shareholdings swelled 10 times in 2020 from the previous year. 

South Koreans also picked up a record amount of domestic stocks last year, worth 87.6 trillion won. 

As more households took interest in company shares, the percentage of stocks in South Koreans’ financial assets surpassed 20% for the first time in the country’s history. 

Let’s take a look at the ratio.

In 2019, stocks accounted for only 15.3% of household financial assets and that increased 5.5 percentage points in just two years. Domestic stocks accounted for 19.2% and overseas stocks made up 1.6% of the 20.8% total. 

This was the first time foreign stocks accounted for more than 1% of South Korean households’ financial assets. 

“While stock investing increased that year, funds moved to safer assets in the latter half of 2021 as a rate hike was widely expected,” a BOK official explained. 

The United States had the largest portion of household financial assets in stocks with 36.9%, out of OECD member countries. France followed with 22.2% and Germany next with 11.4%, based on data compiled in 2020.

Write to Mi-Hyun Jo at mwise@hankyung.com
Jee Abbey Lee edited this article.