Shinhan Asset Management Maumpyeonhan TDF Series, Top Returns Among Default Option Products

Net Inflow of 173.4 Billion KRW in 2022

[Asia Economy Reporter Kwangho Lee] Among the TDF (Target Date Fund) products selected as default option products, Shinhan Asset Management's ‘Maeumpyeonhan TDF’ is recording the highest performance since the beginning of the year.

As of the 16th (Zero-in), there are 47 TDF funds sold as default option products (based on default option Class), and the average return since the beginning of the year is about 2.84%. The four series of Shinhan Asset Management’s TDF (Shinhan Maeumpyeonhan TDF 2030, 2035, 2040, 2050) all exceed the industry average, with the 2040 series showing the highest management performance, recording a 3.61% return since the beginning of the year, surpassing the industry TDF (default option Class) average return by about 80bp (1bp=0.01 percentage point).

Shinhan Asset Management’s TDF, which shows the top management performance among default option TDFs in 2023, is also showing significant growth in scale based on its recent high management performance. Shinhan Asset Management’s TDF, which had an asset size of 192.3 billion KRW at the end of 2020, grew by 195% in 2021 compared to the previous year, and showed 31% growth in 2022, exceeding the industry average (93% in 2021, 13% in 2022) and showing the highest growth rate among the top 5 asset management companies by asset size. The asset size at the end of 2022 was 741.1 billion KRW.

As the government’s second approval of default option products for the retirement pension pre-designated management system (default option) has been completed, competition among asset management companies aiming to capture market share in 2023 has intensified. In particular, the competition among TDFs, which account for the largest portion of performance-linked products included in the finally approved default option products, is even fiercer.

The default option is a system to improve retirement pension returns, where if a retirement pension subscriber does not decide on the product to manage their retirement pension savings, the retirement pension provider automatically invests the savings in a product pre-selected by the provider.

Analyzing the finally approved default option products, portfolios mainly consist of TDFs or portfolio products that include TDFs and principal-guaranteed products such as time deposits for low-risk, medium-risk, and high-risk products excluding ultra-low-risk products. Since there is a limit to differentiating the returns of principal-guaranteed products, the returns of default option products may ultimately vary depending on the performance of the included TDFs, which directly affects the success or failure of the retirement pension provider’s default option and the returns of DC (Defined Contribution) or IRP (Individual Retirement Pension) subscribers.

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