Foreign Investors: US Stocks

Goals

To determine what country is the most interested in U.S. stock-related news and investments for a financial publishing website by identifying the number of people/investors of U.S. stocks from the following countries: Italy, Spain, the U.K., Russia, Japan, China, Korea, France, and Germany.

Early Findings

  • The proportion of U.S. long-term securities held by foreign companies was around 20% between June 2017 to June 2018 according to the US Treasury. However, a New York Times article stated it was closer to 35% in 2018.
  • Santander created a report of the top countries that invest in U.S. stocks. The report is based on the percentage (%) of FDI in U.S. stocks invested in by each country in the year 2017 (Italy, Korea, and Russia were not included) :
-U.K.: 15.2
-Japan: 11.8
-Spain: 1.8
-Germany: 10.1
-France: 7.5
-China: 1.4
  • SelectUSA created a similar report for the year of 2018 that identifies the largest percentages (%) of FDI investment by country (Russia and Italy were not included in the top):
-U.K.: 13.7
-Japan: 11.2
-Germany: 10.9
-France: 7.5
-Spain: 1.8
-China: 1.4
-South Korea: 1.3

Summary of Findings

  • Initial research has found the amount of FDI into U.S. stocks is generally categorized by the amount of money invested or the percentage of U.S. stocks owned by the country, not the estimated number of stocks or investors from each country.
  • Additionally, there was little information on the percentage of U.S. stocks invested in by Russia and Italy, but information was found on the amount of money each country invested.

Proposed next steps:

You need to be the project owner to select a next step.
While we were unable to find a specific number of investors for each country, we were able to identify the percentage for most of the countries, along with the amount of money invested. To create a more robust understanding of these countries, we would provide an investment landscape for each of the 9 countries that would include the amount of money invested, the top 3 industries invested in, how many jobs are supported by each country's investment, and percentage of U.S. stocks invested in.
As the U.S. is the largest stock exchange in the world, many foreign countries invest in it. We could identify 2-3 insights into why foreign countries would invest in U.S. stocks, such as lower returns on investment and lower taxes.