Shinhan Securities: "Stocks and Bonds Alone Can't Defend Returns, Digital Assets Also Needed for Investment"
Asset Allocation Strategies Require More Than Just Stocks and Bonds
Shinhan Investment Corp. has suggested that it is necessary to broaden investment targets beyond stocks and bonds to include commodities and digital assets.
At a press briefing held at the Korea Exchange in Yeouido, Seoul on September 8, Park Wooyeol, Senior Researcher at Shinhan Investment Corp., explained, "Traditionally, we have maintained a 60:40 ratio of stocks to bonds with the expectation that bonds would help defend against falling stocks, but recently, stocks and bonds have been moving in the same direction."
Accordingly, Park stated that they are proposing an allocation of 8% to alternative assets and 2% to digital assets, aiming to discover investment destinations with a low correlation to stocks and bonds.
Park further diagnosed that the trading environment for exchange-traded funds (ETFs) is also changing rapidly. He noted that Nasdaq is pushing for 23-hour trading by the end of this year, and that it is becoming possible to trade stocks and ETFs on virtual asset exchanges, which is accelerating platform competition between traditional finance and digital finance.
He said, "It is now possible to trade stocks, bonds, commodities, and ETFs, which used to be traded in securities accounts, on crypto exchanges as well," adding, "The platform competition between traditional finance and digital finance has begun."
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Park emphasized that the impact of single-stock leveraged ETFs, once cited as a factor driving recent market volatility, has significantly diminished. He stated, "In June and July, the average daily trading volume for single-stock leveraged ETFs was about 15 trillion won, but recently, it has declined to one-tenth or even one-twentieth of that level. Therefore, it is highly unlikely that we will see volatile market conditions similar to that period for the time being."
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