"In September, It's Time to Build a Defensive Portfolio Rather Than Expanding Weight"

Hantoo, KOSPI Band for September Set at 2600~2800

Advice has been given to build a defensive portfolio over the next 2 to 3 months. Korea Investment & Securities identified healthcare, telecommunications, and utilities as low-beta (less volatile) sectors with strong defensive capabilities. The KOSPI band for September was suggested to be between 2600 and 2800 points.

The won-dollar exchange rate, which had fallen to the lowest level in five months at around 1,320 won, started trading with a slight increase on the 27th. The KOSPI index, which closed below the 2,700 mark the previous day, began with a slight decline along with the KOSDAQ. Employees are working in the dealing room at the Seoul Hana Bank headquarters, where various indices such as stock prices and exchange rates are displayed on the electronic board. Photo by Heo Younghan younghan@

On the 2nd, Daejun Kim, a researcher at Korea Investment & Securities, stated in a report, "With the US presidential election approaching, there is exposure to policy uncertainty. It is necessary to temporarily postpone aggressive overweighting," and analyzed, "Building a defensive portfolio over the next 2 to 3 months will contribute to improving expected returns."

He also recommended focusing on low-beta sectors with strong defensive capabilities such as healthcare, telecommunications, and utilities. Researcher Kim explained, "These sectors have favorable earnings momentum and are not exposed to selling pressure related to supply and demand."

He suggested also considering defense, which has a low market beta, as an area of interest. Researcher Kim said, "Defense has investment appeal as order momentum is maintained amid geopolitical risks," and added, "The IT sector, which has a large market capitalization weight, is gradually experiencing a slowdown in growth."

He forecasted the KOSPI band for September to be between 2600 and 2800 points. He noted, "The problem is that the stock market does not immediately rebound just because interest rates have fallen," and pointed out, "Uncertainty over the US presidential election is also a burden. Policy effects cannot be expected in the US for the time being."

He viewed that the stock market is likely to remain sideways for the time being. Researcher Kim said, "This is a disappointing factor for the stock market, which has weakened rebound potential due to the sharp drop in August," and added, "Since there is nothing in the economy or policy to support stock prices, the market is likely to remain sideways for the time being. A defensive stance should be taken while exploring opportunities for a future rebound."