Q2 Overseas Investments by Institutions Hit All-Time High on U.S. Stock Market Gains: Up USD 46.72 Billion

Bank of Korea’s “Q2 Trends in Institutional Investors’ Foreign Currency Securities Investments”
Valuation Gains Rise on Major Global Stock Market Rebounds, Net Investments Continue

The balances of overseas securities investments held by major institutional investors in Korea—such as asset management companies and banks—have surged by nearly USD 47 billion in just three months, marking the largest increase on record. This growth was driven by increased valuation gains amidst a rebound in U.S. stock prices, as well as continued investment fueled by expectations for expanding AI-related investments. As a result, the total outstanding balance itself also reached an all-time high.

Reuters Yonhap News

According to the “Trends of Major Institutional Investors’ Foreign Currency Securities Investments for Q2” released by the Bank of Korea on September 1, the outstanding market value of foreign currency securities investments by major institutional investors—including asset management companies, insurance firms, foreign exchange banks, and securities companies—stood at USD 549.68 billion as of the end of June 2026. This is the largest quarter-end balance on record. The increase was also the largest ever, rising by USD 46.72 billion (9.3%) from the first quarter of this year.

After surpassing the USD 500 billion mark by the end of last year, the balance of foreign currency securities investments experienced a brief dip in the first quarter of this year with a decline of USD 4.62 billion, only to rebound in the very next quarter.

The Bank of Korea explained that the record-high jump in the second quarter’s balance was attributable to expanded valuation gains as the stock markets in the U.S. and other major economies rebounded, as well as continued net purchases of foreign stocks by asset management companies. In fact, the S&P index in the U.S. rose 14.9% in the second quarter, the Nasdaq jumped 21.4%, while the Euro Stoxx in Europe increased by 13.6% and Japan’s Nikkei surged by 37.2% over the same period.

By asset type, the balance of foreign equities reached USD 334.27 billion, up USD 45.76 billion from the first quarter. Foreign equity holdings by asset management companies especially drove this trend, with balances topping USD 312.94 billion—surpassing the USD 300 billion milestone for the first time.

The balance of foreign bonds remained at USD 181.85 billion, similar to the previous quarter. Although there were concerns of declining bond prices due to rising U.S. Treasury yields, which dampened investor sentiment, bargain-hunting helped maintain the level seen in the first quarter. Meanwhile, Korea Papers—foreign currency-denominated securities issued overseas by domestic firms—saw an increase of USD 960 million, mainly led by foreign exchange banks.

By investor type, the balance of investments by asset management firms increased by USD 44.66 billion to USD 397.9 billion compared to the first quarter. Foreign exchange banks also saw an increase of USD 2.81 billion, reaching USD 55.76 billion. Securities companies’ balances rose slightly by USD 100 million to USD 22.26 billion. In contrast, insurance firms saw a decrease of USD 840 million, bringing their holdings down to USD 73.76 billion.

This content was produced with the assistance of AI translation services.