Hanhwa Investment Management Lowers Management Fee of 'Korea Investment TDF Self-Managed Fund' by About 15%
Bond Mixed·2020·2025·2030 Annual 0.23%→0.196%
[Asia Economy Reporter Hwang Yoon-joo] Korea Investment Trust Management announced on the 6th that it has reduced the annual management fee of the 'Korea Investment TDF Self-Managed Fund' by about 15%. The fee reduction for the target date fund (TDF), a pension asset-specialized product, aims to contribute to the formation of national retirement assets.
By vintage, the annual management fees were reduced by approximately 3bp to 5bp as follows: △ Bond-mixed, 2020, 2025, 2030 from 0.23% to 0.196%, △ 2035 from 0.28% to 0.238%, and △ 2040, 2045, 2050, 2055, 2060 from 0.33% to 0.281%.
A new product exclusively for the default option under the retirement pension pre-designated operation system, ‘Korea Investment TDF Self-Managed Fund Default Option Class (C-RO),’ was also newly established. For this class, the sales fee was set at about 80% of the existing retirement pension online class (C-Re) sales fee (annual 0.195%~0.36%), at an annual rate of 0.156%~0.288%.
TDF is a global asset allocation fund that automatically adjusts the portfolio according to the asset allocation strategy based on the investor’s expected retirement year as the target date in their life cycle. According to the fund rating company FnGuide, as of September 2, the 3-year return of the ‘Korea Investment TDF Self-Managed 2050 Fund UH (C-F Class)’ was +28.82%, ranking first among TDFs set up domestically.
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In pension-advanced countries such as the United States and Australia, financial investment within pension accounts is active, but in Korea, most pension assets are managed in principal-guaranteed products. Consequently, the low returns and slow asset growth rate are identified as the main reasons why most Koreans’ retirement funds are chronically insufficient. Efforts by the asset management industry are also important for change. Korea Investment Trust Management actively responded to the demand of younger customers by introducing vintages 2055 and 2060 for the MZ generation for the first time domestically in March this year.
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