During the first half of this year, Korean investors' overseas securities trading volume slightly decreased compared to the second half of last year, but their overseas securities holdings significantly increased. This is analyzed to be a result of the increased volatility in the U.S. stock market due to the outbreak of U.S. President Trump's "tariff war."
According to the "H1 2025 Foreign Securities Custody and Settlement Status" announced today by the Korea Securities Depository, the total overseas securities settlement volume from January to June of this year was $377.99 billion, a 3.2% decrease from $390.65 billion in the second half of last year. This marks the first time that overseas securities settlement volume, which had been steadily increasing since reaching $188.68 billion in the first half of 2023, has faltered in the first half of this year.
Experts cite the instability of the U.S. stock market as the primary reason for this decline. Upon taking office in January this year, U.S. President Donald Trump, as he had forewarned, initiated aggressive protectionist policies and a "tariff war," which appears to have dampened investor sentiment and increased market volatility. Since U.S. securities account for the largest proportion of Korean investors' overseas securities transactions, this policy uncertainty is analyzed to have had a direct impact.
Holdings Surge by 16%, "Buy America" Preference Remains Strong
In contrast to the decrease in trading volume, the amount of overseas securities held significantly increased. In the first half of 2025, overseas securities holdings reached $184.45 billion, a 16.2% increase compared to $158.72 billion in the second half of last year. This suggests that investors are increasingly purchasing and holding overseas securities with a long-term perspective rather than engaging in short-term trading. This is interpreted as a growing strategy to seize opportunities for low-cost purchases amidst uncertainty or to invest based on long-term growth potential.
Among the overseas securities held, stocks accounted for approximately 72% at $136.03 billion, with bonds making up the remainder. By market, U.S. securities still firmly held their dominant position, accounting for 78.7% of the total holdings. Beyond the U.S., the top five markets, including Europe, Japan, Hong Kong, and China, accounted for 98.8% of the total holdings, indicating that investors' interest is concentrated in specific regions.
Tesla, Nvidia "Swept Up"...High-Risk ETFs Remain Popular
In terms of stock-specific holdings, the strength of technology stocks was once again prominent. U.S. integrated technology company Tesla dominated with $21.29 billion, followed by AI chip manufacturer Nvidia with $13.5 billion. Reflecting the explosive growth of the AI industry, AI software company Palantir also ranked high with $4.59 billion. This demonstrates Korean investors' high expectations for innovative technology and future growth drivers.
Tesla was also the most actively traded foreign security during the first half of the year, with an astonishing settlement volume of $27.31 billion. Particularly noteworthy is that high-risk ETFs occupied the second and third spots in settlement volume. The "Direxion Daily Semiconductors Bull 3X" ETF recorded $23.46 billion, and the "Direxion Daily Tesla Bull 2X" product recorded $20.34 billion in settlement volume. These ETFs are high-risk, high-return products that track the price fluctuations of underlying assets by 2 to 3 times, and their issuance is prohibited in the domestic market. However, in overseas markets, regulatory provisions are relatively less stringent, making them easily accessible to individual investors.
Some experts analyze that such high investment in high-risk ETFs indicates a tendency to pursue short-term gains in an unstable market situation, while also suggesting that investors' risk appetite remains high. However, there are also warnings that these investments can lead to rapid losses, emphasizing the importance of obtaining sufficient information and approaching investments cautiously.
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