"Even the Wealthy Can't Resist: Betting Up to 80% on Stocks, Liquidating Cash [Wealth Strategies] ⑤"

Kim Woosik, Head of Sales at Korea Investment & Securities, Interview

"Bull Market Wealth Strategies... The Barbell Approach with Tax-Advantaged Bonds"


Capital Flows into AI and Semiconductors... Shipbuilding, Defense, and Nuclear Power

"In a bull market, you need an investment strategy tailored to the bullish conditions. The key is the 'barbell strategy,' which involves holding both stocks and bonds."

Kim Woosik, Head of the Sales Division (Managing Director) at Korea Investment & Securities, emphasized the importance of the barbell strategy—which combines tax-efficient bonds and long-term U.S. Treasuries as a safety net—during a recent interview at the firm's headquarters WM Center in Yeouido. He noted, "Among ultra-high-net-worth individuals with financial assets exceeding 3 billion won, we are seeing an aggressive trend of increasing equity allocations to over 80%." Nevertheless, Kim stressed the necessity of supplementing these portfolios with safe assets like bonds as part of the barbell approach.

Recently, wealthy clients have been reducing their cash holdings to less than 50% of their portfolios, and in some cases, even liquidating portions of their real estate assets to increase equity investments. Kim noted, "In particular, the shift towards overseas stocks and high-quality domestic stocks has increased by about 1.8 times compared to previous years." He added, "Rather than simply holding bonds, investors are focusing on long-term bonds—primarily U.S. Treasuries and Brazilian government bonds—which serve as a safety net within their asset allocation strategies."

When it comes to investment destinations, there is a marked preference for artificial intelligence (AI) and semiconductors. According to Korea Investment & Securities' analysis of its clients' investment preferences, AI and semiconductors were the most favored sectors (32%). Kim explained, "In a bull market, you need to identify the market's main theme," emphasizing that "the monetization of the AI industry is by far the hottest topic among wealthy investors." Additionally, the shipbuilding, defense, and nuclear power sectors—collectively known as ‘Shipbuilding, Defense, and Nuclear’—have also established themselves as secondary core portfolios.

However, even as wealthy investors increase their equity allocations, they are also managing risk and aiming for tax efficiency by investing in safe assets. This is why Kim advocates the barbell strategy as the core of wealth management, and why he cites long-term U.S. Treasuries and covered call exchange-traded funds (ETFs) as promising asset classes. This goes beyond simply holding safe assets—it is a strategic approach that also considers tax benefits and capital gains.

Kim explained, "Many wealthy clients prioritize tax savings over returns. They care more about what they keep than what they earn." He continued, "There is growing interest in tax-exempt bonds, zero-coupon bonds, and global investments that offer tax benefits." He also noted that, with the expansion of overseas equity investments in recent years, more clients are now interested in capital gains tax-saving strategies.

According to Kim, the top three promising investment assets are: ETFs investing in the global semiconductor supply chain; long-term U.S. Treasuries and covered call ETFs; and Korea's defense and aerospace-themed assets. Covered call ETFs, in particular, provide stable monthly dividends of around 10%, earning the nickname 'a second paycheck' among wealthy investors.

Kim also observed a shift in attitudes toward virtual assets. "Whereas these were once dismissed as speculative, they're now being allocated about 3–5% of overall portfolios as a strategic means to boost the Sharpe ratio," he said. "Indirect investments—such as spot Bitcoin ETFs and other institutional infrastructure—are becoming mainstream."

Additionally, Kim noted, "The questions we get most from wealthy investors are about the revaluation of Korea's stock market and tax reforms. The most frequent questions are, 'What is the upper limit for the KOSPI?' and 'Is now a good time to buy?'" He continued, "After the decision to abolish the financial investment income tax, investors seem to have shed a significant amount of uncertainty. There are also many questions about which assets are most advantageous under the new tax regime."

As for the strengths of Korea Investment & Securities' WM Center, Kim pointed to its team of experts in finance, tax, real estate, and business succession. "This is where the best professionals gather," he emphasized, "with pension, tax, and real estate specialists, as well as corporate finance (IB) staff, working as one team. We collaborate to provide one-stop solutions not just for individual clients' asset management, but also for major shareholders and corporations' capital management and succession issues."

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