"Real Estate Is No Longer in Vogue"... Even Billionaire Investors Are Selling Buildings for Stocks [Wealthy Investors' Strategies] ①

Equity Allocations Increased to 60-80%

Preference for AI and Semiconductors... Heavy Positions in "Samsung and SK hynix"

"Multi-homeowners in Apgujeong and Cheongdam Selling Many Properties"

With the KOSPI approaching the 7,000 mark and the KOSDAQ surpassing 1,200 for the first time in 25 years, historic bullish momentum in the stock market is leading to changes in investment strategies among high-net-worth individuals (HNWIs). Contrary to expectations that the wealthy would be conservative, HNWIs are proactively increasing their equity allocations in response to the strong stock market. In particular, it has been revealed that HNWIs favor semiconductors, especially Samsung Electronics and SK hynix. Whereas real estate used to make up a significant portion of their assets, HNWIs are now selling real estate and reallocating those funds into financial assets, devising new investment strategies.

According to interviews conducted by The Asia Business Daily with heads of Wealth Management (WM) centers at major securities firms, most HNWIs are increasing their proportion of domestic stocks. In the past, a larger portion of their portfolios was allocated to safe assets such as deposits and bonds, but recently, the share of riskier assets like stocks has surpassed that of safe assets.

Kang Joungho, Head of the PIB Gangnam Center at Shinhan Investment & Securities, said, "The proportion of equities has increased significantly. Previously, the asset split was 60% safe assets like deposits and bonds, and 40% risky assets like stocks, but recently, equities have overtaken safe assets in the portfolio. In many cases, clients hold both stocks and bonds, but due to the sluggish bond market lately, demand for stocks has risen."

Kim Wooshik, Head of the Sales Department at Korea Investment & Securities, explained, "As the stock market entered a full-fledged bull phase this year, led by artificial intelligence (AI), aggressive trends have emerged among ultra-high-net-worth individuals with financial assets over 3 billion won, with some expanding their equity allocations to over 80%. The proportion of capital moving from real estate—made liquid through asset sales—into financial assets, especially overseas stocks and high-quality domestic equities, has risen by about 1.8 times compared to previous years."

Jo Miryeong, Head of the SNI Apgujeong Financial Center at Samsung Securities, stated, "I've never seen the domestic stock market perform this well, and this has definitely increased interest in local equities. When managing portfolios and balancing among liquidity, bonds, alternative assets, and stocks, there has been a marked trend since last year to rebalance funds from other asset classes into domestic equities."

The expansion of equity allocations among HNWIs is being attributed to factors such as strong semiconductor earnings and government policies. Seong Sidon, Head of the Yeouido Branch Sales Department at LS Securities, explained, "With the surge in semiconductor demand, related companies are enjoying a boom and leading the market. No matter how bullish the environment, stock prices cannot sustain growth without strong earnings. As results are robust, there's a growing sentiment to invest in fundamentally sound companies." He added, "The government is pursuing investor-friendly policies, such as encouraging corporations to retire treasury shares and strengthen shareholder returns, thereby inducing proactive investment in businesses. The synergy between a booming stock market and supportive government policies is coming into play."

Among stocks, semiconductors are clearly the preferred choice for HNWIs. They are heavily invested in Samsung Electronics and SK hynix, and even the so-called FOMO (Fear of Missing Out) phenomenon is emerging. Kim Jihye, Head of the Apgujeong WM Investment Center at Mirae Asset Securities, said, "The most frequent question from clients recently is when to buy or sell Samsung Electronics and SK hynix. HNWIs are mainly investing in market-leading, earnings-improving sectors such as semiconductors, electrical equipment, and shipbuilding domestically, and in the United States, they are focusing on companies supported by growth trends like AI power infrastructure."

Kang also noted, "Most wealthy clients traditionally invested heavily in bonds, but with the sharp rise in stocks like Samsung Electronics, FOMO has set in. Many increased their stock allocations when Samsung Electronics surpassed 100,000 won per share and SK hynix broke through 500,000 won."

The proportion of real estate in portfolios is on the decline. Increasingly, HNWIs are selling real estate and investing the proceeds in financial assets. Kim Jihye commented, "In Apgujeong-dong and Cheongdam-dong, where many traditional wealthy individuals reside, there are numerous multi-homeowners. Due to government real estate measures, many clients have sold their houses, and the proceeds are moving into capital markets."

Seong Hyunhee, Head of Premier Blue Gangnam 2 Center at NH Investment & Securities, added, "In the past, there were many requests for building purchases, but now there are more inquiries about selling. Clients want to liquidate buildings and move into financial assets."

The proportion of cash holdings is also decreasing, as the focus shifts toward generating higher returns through investment. Seong said, "The share of cash has dropped significantly. There's a strong sentiment that cash should not remain idle."

Center heads expect the stock market's upward trend will continue. Won Jangyeon, Director of the Family Office at Shin Young Securities, said, "The number one question from clients recently is how long the bull market will last. While it's hard to give a definitive answer, considering abundant liquidity, improved corporate earnings, and government policy support, there is still room for further upside."

Seong also commented, "With frequent earnings surprises in sectors like semiconductors, power, and defense, the government's Value-up policy, and companies' active shareholder return initiatives, the undervaluation of Korean equities is being addressed. I also believe the global economy will achieve a soft landing. From that perspective, the upper end of the index will keep rising. While there may be short-term corrections, I expect the market to continue its upward trajectory in the mid to long term." He added, "However, if we see signals such as declining corporate earnings, slower growth, or reduced AI investment, a correction could occur."

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