'Korea Investment OCIO-DO Alaseo' Fund Launched... Targeting Annual Returns of 4~7%

[Asia Economy Reporter Junho Hwang] Korea Investment Trust Management announced on the 30th that it has launched the 'Korea Investment OCIO-DO Alaseo Income Fund' and 'Korea Investment OCIO-DO Alaseo Profit Fund,' suitable for default option composition, in line with the pre-designated operation system (default option) to be introduced on the 12th of next month.

Both products aim for returns of 4-7%. The Korea Investment OCIO-DO Alaseo Income Fund primarily invests in domestic short-term bonds while partially investing in income-type domestic stocks such as dividend stocks and REITs, targeting an annual return of around 4% over the next five years. The Korea Investment OCIO-DO Alaseo Profit Fund aims to achieve an annual return of about 7% over five years by diversifying investments across global stocks, bonds, and alternative assets.

In line with the purpose of introducing the default option to improve the efficiency and profitability of retirement pensions, the fees have been set low. The annual total fee for the Korea Investment OCIO-DO Alaseo Income Fund's C-Re (Retirement-DC/IRP online) class is about 0.37%. The same class of the Korea Investment OCIO-DO Alaseo Profit Fund has an annual total fee of 0.50%, making it suitable for long-term investment.

Another feature is that it is systematically managed following the external delegated investment management (OCIO) process used by large domestic and international funds, from setting investment goals to asset allocation, investment execution, risk management, and performance analysis.

The default option is a system where retirement pension funds are managed in a pre-determined way if the subscriber does not provide specific investment instructions. Retirement pension providers such as banks, securities firms, and insurance companies prepare the pre-designated operation method (default option) with approval from the Ministry of Employment and Labor. Companies incorporate the default option proposed by the retirement pension provider into the regulations with the consent of employee representatives, and employees select their default option.

Through the launch of the Korea Investment OCIO-DO Fund, Korea Investment Trust Management has strengthened the Balanced Fund (BF) type among the four fund types for default options, expanding a diverse product lineup that can be presented as default options, including Target Date Funds (TDF) and Stable Value Funds (SVF).

The Korea Investment TDF Alaseo Fund, the Korea Investment OCIO Alaseo Fund?which introduced the concept of external delegated investment management (OCIO) into retirement pension management?and the Korea Investment e Short-term Bond ESG Fund, which mainly invests in short-term bonds to pursue stable returns, are representative TDF, BF, and SVF products of Korea Investment Trust Management.

Wonseok Oh, Head of Pension Marketing Division 1 at Korea Investment Trust Management, said, "For retirement pensions to properly function as a means of forming retirement assets, investments must pursue returns at least above wage growth and inflation rates. Rather than leaving retirement pensions only in principal-guaranteed products due to concerns about volatility, it is necessary to consider investing in fund types that pursue stable returns while thoroughly managing risks."

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