Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Korean millennials shift attention to US market
By Anna J. Park
Desperate 'Gen Z' investors turn to overseas growth stocks
By Anna J. Park
Local retail investors have recently started to invest more overseas, mainly driven by a “younger generation” searching for what they call “alpha” stocks or those that produce excessive returns.
According to the Korea Securities Depository (KSD), the current value of overseas shares held by local retail investors stood at 101.7 trillion won ($88.9 billion), more than double the 50 trillion won at the end of 2019.
This year alone, Korean retail investors net purchased 17 trillion won worth of overseas stocks, exceeding their total net purchases on the tech-heavy Kosdaq market, which reached 16.3 trillion won.
Young Koreans are at the forefront in investing overseas, mainly focusing on U.S. growth stocks, including Tesla, Apple, Amazon and Google, as well as ETFs to diversify their investments.
Tesla shares are the most traded among local retail investors with $37.8 billion being bought and sold from the second half of 2019 to the first half of this year. Apple came next with $13.6 billion worth of shares traded during the same period.
Tesla also took the first spot in overseas shares retained by local retail investors at $9.23 billion, followed by Apple at $3.95 billion and Amazon at $1.88 billion.
Market watchers say investors here have become smarter in their overseas stock investment patterns.
For instance, the most net-purchased overseas stock by local retail investors during the past week was Amazon, followed by Hang Seng China Enterprises Index (HSCEI) ETF, Alibaba and Facebook, which all declined recently. They think the current bearish price offers them a chance to purchase quality stocks at lower prices, rather than being panicked by the market's temporary fall.
Besides their focus on quality stocks available at temporarily low prices, local retail investors are also demonstrating fast adaptation to the ever-changing market environment.
Last month, Google was their most net-purchased overseas stock, followed by Amazon, Microsoft, Facebook and Roblox. Their focus on U.S. software-based big tech growth stocks contrasts with their previous purchases of more hardware-based companies such as Tesla, Apple and TSMC in the first half of the year. Market watchers say such moves reflect the market environment based on earnings announcements.
They expect local investors to continue focusing on overseas companies with long-term growth potential, buttressed by solid earnings, during the second half of the year.
Some view the increased overseas stock investment trend as a desperate move by the younger generation to seek profits amid hostile local market conditions. The so-called “Gen Z” demographic group has faced high unemployment and skyrocketing real estate prices as soon as they became old enough to join the work force.
As a response, they've shown aggressiveness in various types of innovative asset investments, ranging from coins, P2P investments, fractional equity investments into unlisted private companies, and alternative investments in valuable products such as limited versions of sneakers or bags. Their active investment in overseas stocks is seen as a part of this picture, where they are in desperate need of proactively seeking quick returns.
“Their notion of money is quite different from the older generations,” a market insider said on condition of anonymity. “They're being forced into uncertain market situations where employment stability is lower than ever and the value of work has continued to dwindle due to tech innovations. As the future stripped them of stable expectations about earnings, they have to find their own ways to increase their assets,” he added.