South Korean investors are increasingly favoring U.S. equities, with net purchases reaching $73.6 billion in 2025, nearly five times the previous year. This trend persists despite the Kospi index delivering impressive returns of 75% last year and hitting new highs in 2026. U.S. investments now dominate South Korea’s foreign portfolio, accounting for 63.4%, significantly higher than allocations to other advanced and emerging economies.
The surge in U.S. stock purchases is largely driven by retail investors, known as “seohak ants,” who make up 60% to 70% of annual trading volume. Many are shifting focus to U.S. markets for potentially higher returns and better corporate governance, as U.S. firms are perceived as more shareholder-friendly. Despite government efforts to encourage domestic investment through tax breaks for selling foreign holdings, analysts remain skeptical about reversing this trend.
For market professionals, the continued outflow of capital toward U.S. equities suggests a robust demand for American stocks, highlighting the need for strategies that consider the evolving preferences of South Korean retail investors.
Source: cnbc.com