Big Players Don't React to Every Market Swing... Domestic Stocks Remain in the 70% Range

Despite the stock market entering a correction phase in the second half of the year, high-net-worth investors have maintained the share of domestic stocks in their portfolios. Rather than withdrawing from the market, they appear to be waiting to see whether it can resume its upward trend.
According to trading trends among high-net-worth investors obtained by Financial News on the 27th from the four major brokerages—Mirae Asset, NH Investment & Securities, Samsung Securities, and Shinhan Investment & Securities—domestic stocks accounted for an average of 75.4% of the assets held by high-net-worth investors as of the 10th.
That was only a 0.9-percentage-point decline from 76.3% at the end of the first half. Although the KOSPI Composite Index fell 17% and KOSDAQ dropped by about 9% through the 10th since the start of the second half, domestic stocks still made up the bulk of high-net-worth investors' portfolios. The figure was also 2.4 percentage points higher than in January this year, when it stood at 73.9%. In particular, after falling to 74.4% in July during a sharp market decline, the allocation has since risen back to 75.4%.
This trend is interpreted as reflecting the tendency of high-net-worth investors, who invest surplus funds over the long term, to focus more on long-term growth prospects than on short-term market swings. In fact, their allocation to domestic stocks has remained in the 73%-76% range on average each month this year. Despite market fluctuations, they have maintained a positive outlook and kept roughly three-quarters of their assets in domestic stocks.
Industry insiders explained that big-money investors have increasingly been reviewing their existing portfolios and staying on the sidelines, rather than actively trading.
A Private Banker (PB) responsible for managing high-net-worth clients' assets said, "There has been no significant change in clients' asset allocations even after the stock market rally lost momentum." The PB explained, "The share of domestic stocks could have increased further if the market boom had continued through the second half of the year, but that allocation has remained unchanged as the market has taken a breather after a period of volatility." The PB added, "Trading activity has generally weakened, so clients are not making additional investments," and noted, "They are maintaining portfolios centered on leading stocks while looking for an opportunity to rebound." Another PB said, "Because high-net-worth investors have been investing for such a long time, they are not greatly shaken by short-term surges and falls in stock prices," adding, "Since the fundamentals of domestic companies have not been impaired, they do not appear to feel the need to sell their domestic stocks."
[email protected] Seo Min-ji Reporter