Tucked into a corner of a shopping floor reserved for department store VIPs is a place that draws wealthy visitors even on weekends. It is THE H1 W, the premium wealth management center that Hana Securities opened in June at Hyundai Department Store's Mokdong branch. Kim Dong-hyun, who heads the center — a hub linking private bankers and clients to the brokerage's headquarters — said investor interest has been shifting from offense to defense.
"Early this year, there was a strong push to put as much money to work as possible, on expectations of a rally in the domestic market," Kim said in an interview with the Seoul Economic Daily on the 26th. "After several months of volatile markets, clients have started to break up portfolios that had been concentrated in a single asset — domestic stocks." He added: "The nature of their questions is changing, from how much to buy to how to divide it up. They have started investing with their heads rather than their hearts."
Hana Securities' THE H1 W sets a lower bar than THE Centerfield W in Gangnam, which caters to ultra-high-net-worth clients, extending wealth management services to customers with around 500 million won in financial assets. Those clients have recently been raising their holdings of cash-like assets and bonds while spreading investments into overseas and alternative assets. As more clients focus on protecting what they have, inquiries have also increased about structured products with reduced downside risk, such as principal-protected equity-linked bonds (ELBs), and about tax planning tied to gifting assets to children.
The larger the portfolio, Kim said, the more clearly investors weigh potential losses before expected returns. "The bigger the assets, the more likely clients are to ask how much they could lose in the worst case before asking how much they could make," he said. "Then they go through net returns after taxes and liquidity in detail, trying to lower the volatility of the portfolio." Products that allow investment in U.S. private shares or in dollars were also cited as areas of interest among wealthy clients, who are not limiting themselves to Korean listed stocks.
Another difference separating ordinary investors from wealthy ones is trading speed. Rather than buying and selling all at once in reaction to short-term information, wealthy investors often scale into and out of positions even when they are confident, and decide in advance when and for what purpose the money will be used. "What eats into individual investors' returns in a volatile market is not a bad product choice but emotional trading," Kim said. "When you repeat the pattern of selling into slumps and chasing rallies, the result is performance far below the market's."
On semiconductor stocks, which have recently gone through a correction, he attributed the weakness less to any damage to fundamentals than to geopolitical risk, rising interest rates and delays in policy announcements. He said the shape of shareholder return policies at large caps such as Samsung Electronics and SK hynix, along with their future earnings, remains the key variable determining whether the KOSPI can extend its gains. Beyond the existing market leaders, he pointed to beaten-down blue chips that have been overlooked, as well as stocks with high treasury share holdings or steady profits that offer attractive asset values and dividends.
With the odds of rotation among individual stocks rising, he advised that the second half calls for a diversified portfolio built on asset allocation rather than bets on a particular asset or stock. That means a core-satellite strategy, keeping 60% to 70% of total assets in relatively stable core holdings such as exchange-traded funds (ETFs) of quality domestic and overseas stocks and bonds, and investing the remaining 30% to 40% in growth themes and beaten-down names. "You need to split domestic and overseas stocks at something like 60-40 or 50-50, and keep a portion in bonds and cash-like assets to preserve capacity for additional investment when the market corrects," Kim said.
