Foreign Investors Outperform as Retail Traders Sell at Record Levels Despite Market Rally

Despite a historic bull market, retail investors recorded their largest-ever net selling last year, while foreign investors emerged as the biggest winners in terms of returns.

According to data released by the Korea Exchange on Wednesday, individual investors posted net sales of 26.36 trillion won in the KOSPI market last year, marking the highest annual net selling figure on record. The previous record was set in 2012, when retail investors sold 15.55 trillion won worth of shares.

The sell-off came even as the KOSPI surged 75.6 percent over the year, reaching the 4,000-point level for the first time. Korea’s benchmark index ranked first among G20 stock markets in terms of annual performance, suggesting that many retail investors viewed the rally as an opportunity to lock in profits rather than stay invested.

Foreign investors also posted net sales of 4.66 trillion won during the same period. Analysts attributed this to political uncertainty in the first half of the year and concerns over potential tariff policies under the U.S. Trump administration.

In contrast, institutional investors recorded net purchases of 19.69 trillion won in the KOSPI market, the second-largest annual net buying total on record. The highest level was seen in 2008, during the global financial crisis, when institutions bought 23.23 trillion won worth of shares.

When it comes to performance, foreign investors significantly outperformed other market participants. The average return on the top ten stocks most heavily purchased by foreign investors reached 201.6 percent, more than double the 88.0 percent average return of the top ten stocks favored by retail investors. Institutional investors also outperformed individuals, posting an average return of 132.3 percent.

Samsung Electronics was the most heavily purchased stock among foreign investors, with net buying totaling 9.56 trillion won. Other major foreign inflows went into Korea Electric Power Corp., Kakao, and Hanwha Aerospace.

Retail investors, meanwhile, favored Naver the most, followed by SK hynix. Samsung SDI, Hanwha Ocean, and Doosan Enerbility were also among the most purchased stocks by individuals.

Institutional investors concentrated their buying on SK hynix and Samsung Electronics, with net purchases of SK hynix reaching 5.43 trillion won—roughly double their investment in Samsung Electronics. Financial stocks also drew strong institutional demand, including KB Financial Group and Shinhan Financial Group.

The data highlight a sharp contrast in investment outcomes, with foreign and institutional investors benefiting far more from the market rally than individual traders, despite the historic gains in Korea’s stock market.