South Korean mom-and-pop investors did better with investment in domestic stocks than U.S. ones, and fast-movers are already shifting to Europe where stock activity is heating up.
Individuals reaped a 13.1 percent return on average from their investment in domestic stocks over a six-month period until the end of May, according to Maeil Business Newspaper’s analysis on stock trade data of Mirae Asset Securities Co.’s 1.45 million subscribers with stock investments of minimum 100,000 won ($90) either in Korea or overseas.
Those who invested stocks listed in the U.S. and other foreign exchanges yielded a 6.7 percent return on average.
From December to May, Korea’s main index Kospi soared 21.6 percent, outpacing 14.8 percent gain in the S&P 500 index.
Individuals invested mostly on large-cap stocks in Korea. Their top choice was Samsung Electronics in both common and preferred shares, followed by Hyundai Motor Group’s auto stocks – Hyundai Motor, Hyundai Mobis, and Kia.
Koreans’ overseas investment focused on tech stocks. Their top favorite stock was Tesla. Other favorites include Apple, Palantir Technologies, and Unity Software. They also invested heavily on Churchill Capital Corp IV and other SPAC stocks.
Kospi has outperformed its global peers this year while Tesla and other tech stocks in the U.S. have lost ground amid anticipation for a faster tightening to contain inflationary pressure and asset bubbles, said Kim Dae-joon, investment strategy team director at Korea Investment & Securities Co.
Korean retail investors are migrating to Europe instead in search of bigger profit-making, where the benchmark index STOXX Europe 600 hit a fresh record high closing of 454.01 on Tuesday (local time).
So far this year, Korean retail and institutional investors have purchased record-high $428.6 million worth stocks in Europe, data from the Korea Securities Depository showed. Their stock purchases in Europe for the entire 2020 year amounted $211.5 million and $103.7 million in 2019.
Koreans’ appetite for European stocks is expected to remain strong throughout this year as the European market has higher portion of financial and auto manufacturing stocks than New York with heavy dependence on tech stocks, as well as higher dividend yields, said an analyst.
By Kim Gyu-sik, Shin Yoo-kyung, Kim In-oh and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]