Korean retail investors are seeing lower returns on U.S. stocks as the won strengthens against the dollar. The won-dollar rate closed at 1,339.2 won per dollar on Thursday, down from the 1,550-won range two months earlier. Some investors are considering selling, while others are buying more because U.S. assets have become cheaper in won terms. Analysts expect the exchange rate may rebound to the low 1,400-won range later this year.
The won-dollar exchange rate is displayed at a currency exchange booth in Myeong-dong, Seoul, Sept. 6. Yonhap
Hong, a woman in her 30s living in Seoul, is having second thoughts about her U.S. stock investments.
"I increased the share of U.S. stocks in my portfolio about two months ago because the Korean market was doing poorly. But the stronger won has left my returns below expectations. I'm not sure whether to sell or just hold the stocks for the long term," she said.
Hong is not alone. The won's recent strengthening against the dollar has cut returns for many Korean retail investors holding U.S. stocks, as currency losses offset stock gains.
