The United States is the country where Koreans invest the most in foreign assets.

The soaring stock prices of AI companies like Nvidia, combined with this year's high exchange rates, have prompted more Koreans to move their money to the U.S., a trend dubbed "money move."

According to the Korean National Tax Service on the 14th, the 2024 foreign financial account reporting results showed that both individual and corporate reporting amounts for foreign financial accounts, excluding virtual assets, were highest for U.S. assets.

For individual investors, assets held in the U.S. amounted to 8.8 trillion won, accounting for 69.8% of the total, making the U.S. the clear leader. Japan followed with 700 billion won (5.6%), Hong Kong with 600 billion won (4.9%), Singapore with 500 billion won (4.1%), and China with 400 billion won (3.0%).

For corporations, assets held in the U.S. reached 11.31 trillion won, comprising 27.0% of the total. Japan followed with 8.74 trillion won (20.8%), the U.K. with 2.34 trillion won (5.6%), Singapore with 1.86 trillion won (4.4%), and Hong Kong with 1.83 trillion won (4.4%). Across all asset types, Korean investors showed a strong preference for U.S. investment products. The U.S. accounted for 48.6% of stock investments, 44.2% of collective investment securities, 50.6% of derivatives, and 13.1% of deposits and savings.

The explosive popularity of U.S. stocks among Korean investors was largely driven by AI-related stocks, particularly Nvidia. According to the Korea Securities Depository, Korean investors' holdings of Nvidia, considered the leader in AI, surged from $4.4 billion at the beginning of the year to $11.9 billion in June, a 2.7-fold increase.

The massive rise in Nvidia’s stock price—up 187% this year—led to a sharp increase in total holdings by both individuals and institutions. Korean investments in U.S. stocks skyrocketed from just $9.1 billion in early 2020.

The continued strength of the U.S. dollar this year has also incentivized Koreans to increase investments in U.S. products such as deposits and savings. The won-dollar exchange rate, which fell to 1,306.88 won last year, surged past 1,400 won in April due to global economic uncertainty.

In comparison, the share of investments in other countries showed that Japan accounted for 36.9% of stock investments, followed by Malaysia (3.3%), China (3.0%), and Indonesia (2.2%). For collective investment securities, Hong Kong led with 17.1%, followed by Luxembourg (14.8%), France (6.5%), and the U.K. (6.5%). Derivative investments were dominated by the U.K. (35.8%), followed by Singapore (6.7%), Canada (2.5%), and France (2.2%). For deposits and savings, Singapore ranked first (9.9%), followed by Taiwan (6.5%), Hong Kong (6.3%), and China (6.1%).

Meanwhile, the National Tax Service reported that the total amount of foreign financial accounts reported this year was 64.9 trillion won, a 65.2% decrease from 186.4 trillion won last year. The number of reporters dropped by 462 (8.5%) to 4,957. Those required to report are domestic residents or corporations whose foreign financial account balance exceeded 5 billion won on any given day at the end of each month last year. An NTS official explained, “The significant decrease in foreign financial account reporting this year was largely due to the decline in the value of virtual assets.”



<Hongyong Park>