KB Asset Management's KB Target Return OCIO Fund Surpasses 200 Billion KRW

[Asia Economy Reporter Junho Hwang] KB Asset Management's 'KB Target Return OCIO Fund' surpassed 200 billion KRW in assets under management on the 5th. This is analyzed as a result of continuous inflows of funds from financial institutions managing defined benefit (DB) retirement pension funds.

KB Asset Management established the KB Target Return OCIO Fund Stable Fund at the end of 2020, and added the Growth Fund in January last year. The target returns for these products are 4% and 5%, respectively, and they use ETFs to diversify investments across various assets worldwide, including stocks, bonds, and real estate, according to individual target returns.

The performance over the past year has also been excellent. The Stable Fund, which has been managed for over a year, has recorded an annual return of 8.12%. The Growth Fund, launched one month later, has shown a performance of 6.37%.

The inflow of funds into this product is expected to strengthen further this year. Since April this year, the 'DB-type Reserve Management Committee Installation' has been mandated, enabling companies that had previously managed funds mainly with principal-guaranteed products to systematically invest using the OCIO method. Companies that have managed retirement pensions mainly with principal-guaranteed products have faced issues where expected returns could not keep pace with the increasing retirement liabilities as interest rates fell below wage growth rates.

The primary subscribers to this product are companies seeking systematic management of DB-type reserves or those facing difficulties in asset management. However, individual investors can also subscribe through DC and IRP accounts like general funds. Currently, subscriptions are available through KB Kookmin Bank, KB Securities, Hana Bank, NH Investment & Securities, and Hana Financial Investment.

Youngseong Kim, Executive Director of Global Operations at KB Asset Management, explained, "The KB Target Return OCIO Fund is managed according to target returns, making it suitable for companies managing defined benefit (DB) retirement pensions. From a corporate perspective, the advantage is receiving comprehensive solutions including target setting, asset allocation, management, and post-management."

Meanwhile, since CEO Hyunseung Lee took office last year, KB Asset Management has sought breakthroughs in the pension market by aggressively marketing the KB On Kookmin TDF, increasing its scale from 360 billion KRW to 1 trillion KRW, and has strengthened its pension fund lineup with products such as ‘KB Dynamic TDF’, ‘KB On Kookmin Lifetime Income TIF’, and ‘KB Target Return OCIO Fund’.

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