Mirae Asset Securities: High-Net-Worth Individuals Increase Allocation to China

As enthusiasm for overseas stock investment rises again, the balance of foreign stocks held by domestic investors is also increasing. Unlike the previous trend of investing almost exclusively in the United States, changes in investment portfolios are now being observed. In particular, high-net-worth individuals are rapidly increasing their allocation to relatively undervalued Chinese stocks.

According to Mirae Asset Securities on June 10, the balance of overseas stocks surpassed 40 trillion won again last month, recovering to the level seen at the end of last year. Notably, investment in China is on the rise. The amount spent by Mirae Asset Securities clients on purchasing Chinese stocks this year reached 1.7 trillion won. Of this, high-net-worth individuals with net assets of at least 100 million won accounted for nearly 1 trillion won in purchases. During the same period, high-net-worth individuals made up 70% of the net purchases, which totaled 520 billion won.

Mirae Asset Securities analyzed that this trend is the result of investors perceiving China's undervalued assets and technological innovation as new investment opportunities, especially amid concerns about overvaluation in the U.S. market.

China accounts for 15% of global GDP, but its market capitalization represents only 8% of the world's total. In addition, government-led investment in advanced technology industries such as artificial intelligence (AI) and semiconductors continues. In April this year, BYD surpassed Tesla to become the top player in the European electric vehicle market, signaling a shift in the leadership of innovation.

Investors are quickly reading and responding to these trends. According to the Korea Securities Depository, not a single Chinese company was among the top 50 overseas stocks by net purchases among domestic investors last year. However, this year, four Chinese stocks?including Xiaomi, BYD, and Alibaba?have made the list. Furthermore, as of May 20, the Hang Seng Tech Index, which includes Xiaomi and SMIC, posted a return of 9.4% this year, while the U.S. Magnificent 7 (M7) tech stocks recorded -11.1%, highlighting a stark contrast.

Mirae Asset Securities is also actively strengthening its global asset allocation strategy. The company is accelerating its rebalancing efforts by expanding beyond U.S.-centric investments to markets with high structural growth potential, such as China and India. Mirae Asset Global Investments has also broadened investment options in Chinese innovation industries by consecutively listing the 'TIGER China Tech TOP 10 ETF' and the 'TIGER China Humanoid Robot ETF.'

A representative from Mirae Asset Securities stated, "Mirae Asset has long recognized that growth potential exists everywhere and that investment should transcend geographic boundaries. We have been quick to focus on the technological advancements in China and the massive consumer market emerging in India," adding, "Going forward, we will continue to diversify global asset allocation and proactively identify future growth opportunities from a long-term perspective, maintaining our customer-centered investment principles."