The younger the generation, the stronger the tendency to invest in overseas stocks and exchange-traded products (ETPs). In particular, among those in their 20s, overseas ETPs accounted for as much as 60% of total investment amounts.
According to a report released on the 10th by researchers Kang So-hyun and Kim Min-gi at the Korea Capital Market Institute, individual investors held an average of 5.92 securities products per day on average, of which 4.91 were domestic stocks.
By age group, people in their 20s held the fewest domestic stocks at 3.12. The numbers then increased to 4.30 for those in their 30s, 5.34 for those in their 40s, and 5.41 for those in their 50s, before dipping slightly to 5.10 for those in their 60s.
The share of domestic stocks also rose with age, coming in at 72.6% for those in their 20s compared with 90.9% for those in their 60s. In contrast, people in their 20s and 30s had relatively higher shares of overseas stocks and ETPs.
Measured by amounts held, the overseas investing tendency among younger groups stood out even more. The average daily amount held by all individual investors was about 51.96 million won, with domestic stocks accounting for 63.9% (33.18 million won).
Those in their 20s were investing 60% of their total only in overseas ETPs, and those in their 30s were also investing 45.5% in overseas ETPs. Starting in the 40s, the share of overseas assets gradually declined while the share of domestic stocks tended to increase.
By gender, women on average were diversifying into more names than men, but the preference for domestic stocks was stronger among women. Men's average amount held was about 30% higher than women's, and their share invested in overseas assets was also higher.
The larger the asset size, the greater the number of holdings. For example, investors with 5 million won or less held an average of 2.7 names per day, while those with more than 300 million won held an average of 12.9. In addition, the larger the assets, the smaller the share of domestic stocks and the greater the investment in overseas assets and various products.
Meanwhile, overall, the returns of individual investors were below the market average. Among overseas investors, some saw improvements in portfolio returns and risk-adjusted performance, but about half failed to deliver satisfactory results.
Based on these results, the report suggested that tailored financial education is needed for young people and small investors, and that digital, investment risk warning systems should be expanded.
It also emphasized the need to strengthen tax benefits for long-term and diversified investing, and to review sales methods and information disclosure practices for high-risk products such as leveraged and inverse exchange-traded funds (ETFs).