Bae Jaekyu, CEO of KTB Asset Management, "We Will Achieve Significant Growth in ETF, TDF, and OCIO Markets" (Comprehensive)

Major Product Shift from Mutual Funds to ETFs
Alternative Investment Division Separated to Strengthen Alternative Management Capabilities
Considering 'Kindex' Brand Renewal

[Asia Economy Reporter Hwang Yoon-joo] "Going forward, Korea Investment Trust Management will continue to maintain the performance of active funds while achieving significant growth in the exchange-traded fund (ETF), target date fund (TDF), and outsourced chief investment officer (OCIO) markets."

On the 22nd, Bae Jae-gyu, the newly appointed CEO of Korea Investment Trust Management, expressed his aspirations at an online inauguration press conference, stating, "My goal as CEO is to create an asset management company that responds to changes in the asset management industry environment and actively leads those changes."

◆ 'ETF·TDF·OCIO'... Market Keywords Highlighted by CEO Bae Jae-gyu= CEO Bae mentioned major changes in the asset management industry, including ▲ the trend shift from active to passive management ▲ the transition of major investment products from funds to ETFs ▲ increased demand for asset allocation products due to the expansion of the pension market ▲ and growth of the retail market centered on individual investors.

In response, CEO Bae’s strategy is to expand the vehicle from funds to ETFs and to broaden the target customers from institutions to retail investors. First, Korea Investment Trust Management plans to focus on building an ETF ecosystem and developing new products. CEO Bae said, "We will respond to ETF market demand with thematic products centered on ESG, energy, data, and new industries, as well as pension-type products useful for pension investments."

ETFs have recently established themselves as a mega trend, with market demand growing. The net asset value of the domestic ETF market reached 74 trillion KRW at the end of 2021, a 42% increase from 52 trillion KRW the previous year. The market expects the domestic ETF market to grow to over 200 trillion KRW within five years. Although Korea Investment Trust Management has traditionally been strong in public offering funds, its presence in the ETF market has been weak. CEO Bae, known as the "Father of ETFs," emphasized ETFs at the inauguration press conference in this context.

They will also actively prepare for the growth of the pension market, including retirement pensions and personal pensions. CEO Bae stated, "I believe the greatest demand in the asset management market going forward lies in the pension market," adding, "We will enhance the competitiveness and market share of pension funds, including TDFs, and establish an organization to prepare for the introduction of the fund-type retirement pension system in the OCIO business."

He also presented the goal of evolving from a "fund provider" that only offers individual products to customers to a "solution provider" that offers comprehensive solutions to achieve investment objectives. CEO Bae said, "We will also focus on establishing a desirable investment culture centered on long-term investment and global diversification and on educating investors."

CEO Bae emphasized, "The Korea Investment Trust Management I am designing is a 'great company' beyond just a 'large company.' The core of a great company is a great management philosophy," adding, "The purpose of an asset management company is not to pursue short-term profits but to prioritize customer value, and the most important entity is the customer."

◆ Domestic ETF Father, Will He Rewrite the ETF Legend at Korea Investment Trust Management? = Attention was also focused on how CEO Bae would grow the ETF business at Korea Investment Trust Management. He is recognized as the figure who first listed ETFs in the domestic market in 2002 and launched Asia’s first leveraged ETF and inverse ETF in 2009 and 2010, respectively, helping to grow the domestic ETF market.

CEO Bae stated that despite the growth potential of the ETF market, he has no plans to reduce Korea Investment Trust Management’s public offering fund business. He said, "The market environment is shifting investment instruments from funds to ETFs," adding, "(Public offering) fund demand remains alive, and ETFs are an area where new capabilities are being added."

Regarding Korea Investment Trust Management’s flagship ETF brand 'KINDEX,' he said, "It is important," adding, "We have been considering maintaining the 'KINDEX' brand, and in the second half of the year, we will renew the ETF brand and establish concrete promotion and marketing strategies for the overall image, which we will announce again then." Earlier, CEO Bae decided to discontinue the Navigator brand, judging that it was difficult to operate two brands (Navigator and KINDEX) simultaneously.

On the separation of Korea Investment Trust Management’s alternative investment division, he explained, "It is to strengthen alternative investment capabilities." He said, "The separation of the alternative asset management company is a confirmed fact," adding, "Korea Investment Trust Management, which has established itself as a strong player in traditional asset management, separated the alternative investment division to also succeed in alternative investments."

CEO Bae stated that his goal at Korea Investment Trust Management is to achieve innovation in asset management from a mid- to long-term perspective rather than focusing on short-term performance. He said, "I am focusing on a five-year plan rather than this year’s annual target," adding, "Considering market size and the status of domestic asset managers five years from now, I have a target scale in mind, which I will share later."

Meanwhile, CEO Bae began his career in finance at Korea Comprehensive Financial in 1989, moved to SK Securities, and joined Samsung Asset Management (then Samsung Life Investment Management) in 2000. At Samsung Asset Management, he served as head of the Index Management Division, head of the Passive Division, head of Passive overall, and Chief Investment Officer (CIO) before being appointed CEO of Korea Investment Trust Management on the 1st of this month.

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