South Korean ‘ant investors’ flock to US equities as domestic market hits record highs
A stockbroker monitors exchange rates in a workroom at the Korea Exchange Bank in Seoul
Jung Yeon-je | Afp | Getty Images
South Korean stocks have been climbing to record highs over the past year, but that hasn’t dampened the allure of US stocks for its residents.
By 2025, South Korea became the third largest buyer of US stocks, behind Singapore and Norway, according to CNBC’s analysis of US Treasury data. Investment hotspots such as the Cayman Islands and Ireland are not included.
The country bought a total of $73.6 billion in US stocks in 2025 – nearly five times what it did in 2024. The rush into US stocks continues as South Korea shows Kospi The stock index delivered 75% returns last year, and has hit a record high this year.
South Korea’s preference for US stocks is also reflected in its large share of the country’s foreign exchange portfolio.
A report by the Bank of Korea last week revealed that the share of US investment in the country’s foreign reserves stands at 63.4%, far exceeding the 25.3% of developed economies and 36.8% of emerging economies.
‘Seohak ants’
A significant part of this huge outflow is owed to individual investors, according to experts. South Korea has about 15 million retail investors who account for 60% to 70% of annual trading volume, according to investment platform GAM Investments.
Data from the Korea Securities Depository’s settlement system – widely used as a proxy for investor activity – show that net purchases of US stocks exceeded net purchases overseas, meaning investors were selling non-US assets while continuing to buy US stocks.
Retail investors who buy foreign stocks are known as “seohak ants” in South Korea. Seohak translates to “Western learning,” but is now used to refer to Korean investors (often called ants) who buy foreign stocks.
Daniel Yoo, global strategist and head of global asset allocation at Yuanta Securities Korea, said retail investors are responsible for this exploitation of US stocks. “Retail investors are greatly appreciating the attractiveness of investing in US markets.”
Potentially higher returns, and a positive outlook for the US market in the country have been driving retail investors into US stocks.
I Kospiexcessive performance in relation to S&P 500 again Nasdaq in 2025 has done little to reduce the attractiveness of US equities, as the S&P 500 has outperformed the local benchmark in four of the past five years.
Faced with a sluggish domestic market before 2025, retail investors have shifted their attention to the US market, which offers higher returns, said Kang Min Joo, senior economist for South Korea and Japan at ING.
“For people this year, compared to 2020, their investment in foreign assets is three times, or almost four times more than in 2020,” he added.
Yoo said US companies are also seen as more shareholder-friendly and transparent, with a history of rewarding investors with dividends and buybacks, as well as strict corporate governance compared to South Korean firms.
Bringing retail investors home
Seoul has taken measures to try to stem the outflow, with the country’s Ministry of Finance announcing a tax break for individual investors selling their foreign assets.
The government has announced that it will tax capital gains from overseas stocks if the proceeds are invested in domestic stocks for one year, subject to certain conditions.
However, analysts remain skeptical that the government’s measures will prevent the migration of “ant investors.”
Florian Weidinger, CEO at Santa Lucia Asset Management, told CNBC that while recent efforts in South Korea are trying to create a strong equity culture at home that encourages wealth creation away from the real estate market, local people don’t seem convinced.
The South Korean government announced the measures in December last year, but in the first two months of 2026 combined the country was still the largest buyer of American stocks, about 10 billion dollars, and the Cayman Islands and Ireland were not included.
Yuanta Securities’ Yoo said the measures may be “partially effective”, bearing fruit in the short term as Kospi’s performance remains strong, but added that the tax break is not enough to keep investors away from US stocks.
