Shinhan Securities Says Stocks, Bonds Alone Fall Short, Recommends 2% Allocation to Digital Assets

Shinhan Securities said portfolios need to expand into alternative investments, including digital assets, arguing that stocks and bonds alone no longer provide sufficient diversification benefits.

According to Asia Economy on September 8, Park Woo-yeol, a senior researcher at Shinhan Securities, presented an asset-allocation strategy that includes 8% in alternative assets and 2% in digital assets at a press briefing held that day at the Korea Exchange in Seoul's Yeouido district. He said stocks and bonds have continued to move in the same direction.

Park said the boundary between traditional finance and digital finance is eroding quickly, with crypto exchanges increasingly enabling trading in stocks and exchange-traded funds. Competition among financial platforms is also picking up as Nasdaq pushes to extend trading to 23 hours by year-end.

He also assessed that the impact of single-stock leveraged ETFs, which had recently fueled stock-market volatility, has diminished. Average daily trading value in those products, which reached about 15 trillion won ($10.8 billion) in June and July, has recently fallen to one-tenth to one-twentieth of that level, reducing the chances of a repeat of the sharp market swings seen at the time.