Korea’s individual investors return to increase foreign stock holdings in H1

Korean individual investors have seen a rebound in both their holdings and transactions of foreign securities in the U.S. market, as global stock markets, including the U.S., experience a strong upward trend.

According to the Korea Securities Depository (KSD) on Monday, the total balance of foreign securities held by domestic investors at the end of June reached $99.83 billion, while the transaction amount from January to June amounted to $188.68 billion.

The balance of foreign securities increased by 30.2 percent compared to the previous half-year, while the transaction amount grew by 12.6 percent during the same period.

The transaction amount for foreign securities had been declining for four consecutive half-year periods since the first half of 2021, reaching its lowest point in the second half of last year at $167.5 billion. However, it rebounded in the first half of this year.

Similarly, the balance of foreign securities reached a peak of $100.5 billion in the first half of 2021, declined to $76.69 billion in the second half of last year, and then rebounded in the first half of this year.

Among the types of foreign securities, foreign stocks accounted for $74.69 billion, marking a 34.9 percent increase compared to the second half of last year ($55.37 billion), while foreign bonds reached $25.14 billion, showing a 17.9 percent increase compared to the second half of last year ($21.32 billion).

In terms of market allocation, the U.S. held the highest share at 68.4 percent of the total balance. When considering only foreign stocks, the U.S. accounted for 87.7 percent of the total foreign stock holdings, amounting to $65.49 billion, up by 48.1 percent compared to $44.23 billion in the previous half-year.

The balance of Japanese stocks reached $3.1 billion, securing the second position after the U.S. and moving up one rank from the previous quarter.

The top holdings in foreign stocks were all U.S. stocks, with Tesla, Apple, NVIDIA, ProShares UltraPro QQQ, and Microsoft taking the lead.

Among these stocks, the ProShares UltraPro QQQ, traded under the ticker symbol TQQQ, is a high-risk leveraged product that tracks 3x the return of the Nasdaq 100 Index.

The top 10 holdings, including TQQQ, accounted for 48.6 percent of the total foreign stock holdings ($74.69 billion).

In terms of transaction amounts, foreign stocks reached $141.41 billion, representing a 7.5 percent rise from the previous half-year ($131.55 billion), while foreign bonds amounted to $47.27 billion, showing a 31.2 percent increase.