"67% of Korean Asset Holders Plan to Reduce Cash Holdings to Counter Inflation"

Decline in Cash Holdings Among Wealthy in Asia and Africa Expected
Main Concerns: Inflation, Recession, and Uncertainty

[Asia Economy Reporter Minwoo Lee] A survey revealed that 67% of Korean asset holders plan to reduce the cash portion of their assets in preparation for inflation.

Standard Chartered (SC) Group, the parent company of SC First Bank, announced this through the '2022 Expected Asset Report.' This report investigates changes in investment decisions and the resulting shifts in major asset classes among asset holders in Asia, the Middle East, and Africa. The survey included over 15,000 investors from emerging affluent, affluent, and ultra-high-net-worth groups residing in 14 markets across Asia, the Middle East, and Africa, including South Korea.

According to the report, 42% of Korean investors are managing their assets more actively and have changed their investment strategies considering the current economic situation. They cited inflation (35%), the threat of recession (27%), and global economic uncertainty (26%) as their biggest concerns. Investors across all 14 markets also viewed rising inflation (34%), recession (27%), and global economic uncertainty (22%) as major concerns.

Since the beginning of this year, Korean investors have made changes in asset management, such as reducing spending (26%) and making new decisions regarding their asset portfolios (15%). As a result, major asset classes are expected to change.

Furthermore, to respond to inflation, 61% of investors across the 14 markets and 67% of Korean investors expressed intentions to reduce their cash holdings. Based on this, SC Group forecasts that the cash portion of assets among investors in the 14 markets will decline from 26% in 2022 to 15% in 2023.

Investors still consider stocks as the core of their assets but are reconsidering stock holdings due to market volatility. The proportion of stocks in Korean investors' portfolios is expected to drop from 22% to 11.7% next year. Nevertheless, to respond to inflation next year, 26% of Korean investors showed interest in value stock investments, and 22% in bond investments. Meanwhile, 28% of Korean investors stated that they invested in gold due to inflation.

Sustainable investment is expected to attract investor interest despite concerns about 'greenwashing.' More than half (52%) of investors across the 14 markets anticipate an increase in sustainable investments in 2023. Twenty percent of Korean investors are also expected to expand sustainable investments.

Meanwhile, 23% of Korean investors utilized asset management professionals. Among the 14 markets, younger investors aged 18?35 (63%) were more likely to seek help from asset management professionals than those aged 55 and older (39%). On average, investors who use professional advice tend to have more diversified portfolios and larger sustainable investment amounts. Sixty-two percent of investors across the 14 markets managed their assets directly.

Sachin Bambhani, Head of Wealth Management at SC First Bank (Executive Director), said, "For investors navigating global economic uncertainties, it is important to make decisions aligned with their goals and external environment, and portfolio diversification can seize excellent opportunities. Utilizing personalized advice will help overcome the current market situation and achieve long-term goals."

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