"Even Billionaires Are Buying More KOSPI... Selling Now Could Be Regrettable" [Wealthy Investors’ Strategies] ⑥

Interview with Sung Hyunhee, Head of Premier Blue Gangnam 2 Center at NH Investment & Securities

AI-related Stocks—Such as Semiconductors and Power Infrastructure—Still Have Strong Earnings Prospects

Brazilian Bonds, Dollars, and Gold Remain

Seong Hyunhee, Head of Premier Blue Gangnam 2 Center at NH Investment & Securities, is being interviewed by The Asia Business Daily. Photo by Dongjoo Yoon

Among wealthy individuals in Gangnam, the hottest asset these days is undoubtedly domestic stocks. This comes as no surprise, given that the KOSPI, which had stagnated around the 2,500 level until early last year, has surged more than threefold in just one year.

Private bankers (PBs) at securities firms, who help grow the assets of affluent clients, say that even ultra-wealthy individuals with assets in the tens of billions of won—who have traditionally invested conservatively—are now most frequently asking whether they should buy more domestic stocks such as Samsung Electronics and SK hynix, how long they should hold them, and whether the market is overheating.

High Net Worth Individuals Continue to Buy Domestic Stocks

Seong Hyunhee, Head of the Premier Blue Gangnam 2 Center at NH Investment & Securities, said in a recent interview with The Asia Business Daily, "Because the local stock market is so hot, even conservative high net worth individuals are increasing their allocation to domestic equities." She added, "Many of our center's clients have assets worth tens of billions of won, and they are also highly interested in domestic stocks."

Seong, who is a former Master PB—a title awarded to the top-performing private bankers at NH Investment & Securities—has worked in private banking since 2014, and said that she has never seen such intense enthusiasm for domestic equities.

She stated, "Even though the KOSPI has risen significantly, the most promising asset right now is still domestic stocks." She further predicted, "Among domestic stocks, semiconductors and power infrastructure related to the artificial intelligence (AI) industry will likely perform well for the time being."

Although stock prices have already risen significantly, she remains optimistic about further gains. She explained, "Most AI-related stocks have already gone up, but their earnings outlook remains strong. As long as corporate earnings continue to improve, it is only natural that stock prices have further room to rise, so there is no reason to realize gains at this point."

She also expects the upper limit of the KOSPI to rise if corporate earnings improve. Seong remarked, "As corporate earnings improve and stock prices go up, the KOSPI will also climb higher." She continued, "The government's strengthened shareholder return policies are prompting companies to introduce more value-up initiatives, which could further lift our index. Additionally, the fact that the global economy, led by the United States, is not in bad shape is also a positive factor."

Outside of equities, she suggested holding Brazilian bonds, U.S. dollars, and gold for hedging (risk diversification) purposes. Seong said, "Brazilian bonds offer relatively stable interest income because of their high yields and tax-free status. For bonds denominated in the Brazilian real, the yield exceeds 10% per year, so I recommend allocating a portion of the portfolio to them for interest income rather than capital gains." She added, "Since the dollar and gold are considered safe-haven assets, it's not a bad idea to fill a portion of the portfolio with them whenever their prices fall."

Seong Hyunhee, Head of NH Investment & Securities Premier Blue Gangnam 2 Center, is posing after an interview with The Asia Business Daily. Photo by Dongju Yoon

If Corporate Earnings Outlook Weakens, Reduce Risk Asset Allocation

However, if the outlook for corporate earnings deteriorates, she believes that would be the time to reduce investments in risk assets. Seong advised, "Ultimately, the stock market moves in line with corporate earnings. If there are signs that the earnings outlook is weakening or that investment is slowing down, it is time to be cautious."

With both domestic and global stock markets performing strongly, the center's assets under management have increased to the 7 trillion won range. Over the past one to two years, assets under management have grown by about 1 trillion to 2 trillion won, as strong returns have boosted the wealth of existing clients and attracted new funds.

Seong identified the biggest difference between wealthy individuals and ordinary people in managing money as having a long-term perspective. She noted, "Even when the market faces difficulties, it is rare for most clients to strongly complain or pressure their PBs. This is because high net worth individuals adhere to asset allocation principles and invest with a long-term view."

As for her goal as a center head, she emphasized, "I want our office to become Korea's top family wealth management firm, one that clients can trust with their family assets." She added, "I feel most rewarded when I help clients with asset growth, tax planning, succession, and other areas. I will continue to do my best with a sense of responsibility to become a true partner for our clients."

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