If You Wonder How to Choose a Pension Fund... NH Securities Publishes 'THE100' Issue 57

[Asia Economy Reporter Kum Boryeong] It has been analyzed that pension funds should be selected based on suitability to investment propensity, higher returns compared to benchmark indices, and having an asset size of over 5 billion KRW.

NH Investment & Securities' 100-Year Life Research Institute announced on the 9th that it published issue 57 of the magazine 'THE100.' THE100 is a comprehensive information magazine containing financial and cultural knowledge.

Issue 57 includes 'Six Criteria for Choosing Pension Funds.' This is because investors' interest is focused on pension savings funds, which are expected to yield relatively high returns.

First, you need to find a fund suitable for your investment propensity. This is because funds suitable for risk-tolerant investors who endure losses for higher returns differ from those for risk-averse investors who want to avoid losses even if returns are lower.

Funds with returns higher than benchmark indices are also important. For example, in the case of funds investing in domestic dividend stocks, it is necessary to check whether their performance is favorable compared to benchmark indices such as the KOSPI High Dividend 50. By looking at fund return data provided in the fund prospectus or on the fund distributor’s website, you can see past returns as well as benchmark and average returns of the same type.

As important as returns is the risk level of the fund. Standard deviation is considered a representative risk indicator. Kim Eunhye, Senior Researcher at NH Investment & Securities' 100-Year Life Research Institute, explained, "When investing in a fund, expected returns and risk levels should be considered together. If the risk level is the same, it is desirable to invest in a fund with higher returns; if returns are the same, then a fund with a lower risk level."

It is also important to check whether the fund has an asset size of over 5 billion KRW and continuous inflows of funds. If the asset size is small, it is difficult to execute sufficient diversification, and management may be relatively neglected. Also, frequent changes of fund managers indicate operational issues with the fund, so it is better to choose funds where fund manager changes are infrequent or less impactful, according to Kim.

It is important to check whether the fund is a top-rated fund. Kim said, "Leading domestic fund rating companies such as Zeroin, FnGuide, and Korea Fund Ratings assign fund ratings from 1 to 5. If the fund you are interested in has a rating of 1 or 2, you can invest with relative confidence, but if it is 4 or higher, it is advisable to reconsider the investment."

Additionally, issue 57 of THE100 magazine introduced the story of artist Lee Sangpyo, who retired from professional management and is living a second life as an Oriental painting artist. Financial information included topics such as 'Feeling Dividend Stocks Amid a Shaky Market' and 'The Era of Pension Savings Funds.'

THE100 magazine can be viewed at NH Investment & Securities branches or on the 100-Year Life Research Institute’s website.

This content was produced with the assistance of AI translation services.