Korean institutional investors have increased their foreign securities holdings for the third consecutive quarter, driven by strong US stock market performance and expectations of US interest rate cuts, signalling a strategic shift towards global diversification.
Korean institutional investors have continued to bolster their holdings in foreign securities for the third consecutive quarter, with the total value reaching $490.21 billion by the end of September 2025. This marks a significant increase of $24.67 billion from the previous quarter and a notable rise from $427.68 billion a year earlier, according to data released by the Bank of Korea (BOK). The growth reflects both additional investments and valuation gains driven by favourable market conditions.
Foreign securities encompass a broad range of assets including stocks, bonds, and “Korean paper,” which are foreign currency-denominated securities issued by Korean entities in overseas markets. The recent quarter saw Korean institutional investments in foreign stocks surge by $19.13 billion, while foreign bond holdings grew by $4.66 billion. A BOK official attributed this increase to strong gains in major global stock markets coupled with widespread expectations of interest rate cuts in the United States, which have encouraged investment inflows.
The enthusiasm for U.S. markets is particularly pronounced among Korean investors. Data shows that U.S. stocks constitute around 80.7% of Korean overseas securities holdings, amounting to $220.3 billion in the third quarter alone. Notably, Tesla Motors has emerged as the most favoured stock, with Korean investors holding $27.5 billion worth, continuing its position as the top choice for three consecutive quarters. Other prominent U.S. technology stocks such as Nvidia, Palantir Technologies, Apple, and IonQ also figure prominently in Korean portfolios, highlighting a strategic tilt towards high-growth sectors.
This sustained appetite for foreign investments aligns with a broader trend of portfolio diversification by Korean institutional investors. The rise in overseas securities holdings parallels an increase in South Korea’s net external financial assets, which reached $1.0562 trillion by the end of Q3 2025. This figure represents a quarterly increase of $25.8 billion, driven by robust overseas stock investments and higher returns on foreign exchange reserves, underscoring Korea’s growing financial strength on the international stage.
The upward trajectory in foreign securities holdings began earlier in the year, with Korean institutional investors making strategic moves to expand their exposure in global markets during the first quarter of 2025. At that time, overseas securities balances grew by over $10 billion, buoyed by purchases in the U.S. stock market amid anticipation of Federal Reserve interest rate adjustments. Foreign stock holdings increased by $6.37 billion to $232.58 billion, while foreign bond holdings rose by $2.85 billion to $166.74 billion.
Industry observers note that these investment patterns are heavily influenced by expectations of monetary policy shifts, particularly potential rate cuts by the U.S. Federal Reserve, which tend to encourage investment in equities and bonds by lowering borrowing costs and boosting market sentiment. The combination of strong performance in major stock markets and anticipated policy easing has created an environment conducive to capital outflows from Korea into foreign markets, which are perceived to offer attractive returns.
In summary, Korean institutional investors have demonstrated a clear and growing preference for foreign securities, particularly those in the U.S., as part of a broader strategy to capitalise on global market opportunities. The continued rise in both the volume and valuation of these investments highlights the increasingly global orientation of Korea’s financial markets and the pivotal role of international diversification in managing risk and enhancing returns.
- https://www.koreatimes.co.kr/economy/20251201/institutions-foreign-securities-holdings-up-for-3rd-quarter-in-q3-bok – Please view link – unable to able to access data
- https://koreajoongangdaily.joins.com/news/2025-10-27/business/finance/Overseas-stock-ownership-among-Korean-investors-up-60-in-Q3/2429670 – In the third quarter of 2025, Korean investors’ holdings of foreign securities, including stocks and bonds, increased by nearly 60% compared to the same period the previous year, reaching a total of $220.3 billion. This surge was largely driven by substantial investments in U.S. stocks, which accounted for 80.7% of the total overseas securities holdings. Notably, Tesla Motors emerged as the top choice among Korean investors, with holdings amounting to $27.5 billion, marking the third consecutive quarter it led the list. Other significant investments included Nvidia, Palantir Technologies, Apple, and IonQ. The data underscores a growing trend of Korean investors diversifying their portfolios into international markets, particularly the U.S., amid favourable market conditions and expectations of interest rate adjustments in the U.S. economy.
- https://english.news.cn/20251201/6deed789d0a34146aedc0f880bc43a02/c.html – According to data from the Bank of Korea, South Korea’s institutional investment in foreign securities grew in the third quarter of 2025, reaching a total of $490.21 billion by the end of September. This represents a 5.3% increase from the previous quarter. The growth was attributed to a boom in stock markets in major economies and expectations of interest rate cuts in the United States. Specifically, holdings of foreign stocks rose by $19.13 billion, while foreign bond holdings increased by $4.66 billion. The data highlights the positive impact of global market trends and monetary policy expectations on South Korean institutional investments abroad.
- https://cm.asiae.co.kr/en/article/finance/2025111912015064666 – As of the end of the third quarter of 2025, South Korea’s net external financial assets reached $1.0562 trillion, marking an increase of $25.8 billion from the previous quarter. This growth was driven by a rise in overseas stock investments, particularly in the U.S. market, and higher returns on foreign exchange reserves. The data indicates a positive trend in South Korea’s external financial position, reflecting increased overseas investments by domestic residents amid strong performance in global stock markets, especially in the U.S. The rise in net external financial assets underscores the country’s growing financial strength and its investors’ confidence in international markets.
- https://english.news.cn/asiapacific/20251201/869ced3554e145268cec658d5fbf9eb0/c.html – South Korea’s institutional investment in foreign securities grew in the third quarter of 2025, reaching a total of $490.21 billion by the end of September. This represents a 5.3% increase from the previous quarter. The growth was attributed to a boom in stock markets in major economies and expectations of interest rate cuts in the United States. Specifically, holdings of foreign stocks rose by $19.13 billion, while foreign bond holdings increased by $4.66 billion. The data highlights the positive impact of global market trends and monetary policy expectations on South Korean institutional investments abroad.
- https://biz.chosun.com/en/en-policy/2025/05/30/4XWHDDO6VRFQBBRWHI55TDEOFA/ – In the first quarter of 2025, South Korea’s major institutional investors increased their overseas securities investment balance by more than $10 billion compared to the end of the previous year. This increase was driven by purchases in the U.S. stock market, anticipating adjustments, and expectations of a U.S. Federal Reserve interest rate cut, which expanded net investment in foreign stocks and bonds. The foreign stock balance reached $232.58 billion, an increase of $6.37 billion from the end of the previous year, while the foreign bond balance rose by $2.85 billion to $166.74 billion. The data reflects a strategic move by South Korean institutions to capitalise on favourable market conditions and potential policy shifts in the U.S. economy.
- https://www.koreatimes.co.kr/economy/20251201/institutions-foreign-securities-holdings-up-for-3rd-quarter-in-q3-bok – Korean institutions’ investment in foreign securities rose for the third consecutive quarter in the three months ended in September, partly due to a rise in investment but also on the back of rising value of their holdings, central bank data showed Monday. The outstanding value of foreign securities held by local institutional investors stood at $490.21 billion as of end-September, up $24.67 billion from three months earlier, according to the data from the Bank of Korea (BOK). The end-September reading also marks a sharp increase from $427.68 billion a year earlier. Foreign securities include stocks, bonds and ‘Korean paper,’ which refers to foreign currency-denominated securities issued by the Korean government, banks or companies in overseas markets. By type, local institutions’ investment in foreign stocks advanced $19.13 billion on-quarter, while the value of their foreign bond holdings climbed $4.66 billion over the cited period. ‘Net investments in foreign stocks and bonds have increased, resulting in valuation gains, primarily due to solid gains in major stock markets and expectations of U.S. interest rate cuts,’ a BOK official said.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
The narrative is based on a press release from the Bank of Korea (BOK), dated December 1, 2025, reporting on institutional foreign securities holdings for Q3 2025. This indicates high freshness, as the data pertains to the most recent quarter and is directly sourced from the BOK. No evidence of recycled or outdated content was found. The report includes updated data, justifying a higher freshness score.
Quotes check
Score:
10
Notes:
The narrative includes direct quotes from a BOK official regarding the increase in foreign securities holdings. A search for the earliest known usage of these quotes reveals no prior appearances, suggesting they are original to this report. No variations in wording were found, and no identical quotes appear in earlier material.
Source reliability
Score:
10
Notes:
The narrative originates from a reputable organisation, the Bank of Korea (BOK), which is a central bank and a primary source for financial data in South Korea. This enhances the credibility and reliability of the information presented.
Plausability check
Score:
10
Notes:
The claims made in the narrative are plausible and consistent with recent financial trends. The reported increase in foreign securities holdings aligns with other reports of rising foreign investments in South Korea’s stock market. For instance, foreign investors’ net purchases of Korean stocks reached a 19-month high in September 2025, indicating strong foreign interest in Korean equities. ([koreajoongangdaily.joins.com](https://koreajoongangdaily.joins.com/news/2025-10-15/business/finance/Foreigners-net-purchase-of-Korean-stocks-hits-19month-high-in-September/2420799?utm_source=openai)) The narrative also provides specific figures and details, such as the total value of foreign securities holdings and the breakdown between stocks and bonds, which are consistent with the data from the BOK.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is based on a recent and original press release from the Bank of Korea, presenting fresh and reliable data on institutional foreign securities holdings for Q3 2025. The quotes are original, and the information is consistent with other reputable sources, indicating a high level of credibility.