Asset Management Aligned with Retirement Timing... KTB Asset Management's 'TDF' in Focus

In the era of aging populations, financial products that set retirement target dates and manage assets accordingly are gaining attention. This is because projections indicate that the actual income replacement rate of the National Pension will fall below 25%, strengthening the awareness that individual retirement planning is necessary for a stable old age.

Korea Investment Trust Management operates a specialized product called the 'Target Date Fund (TDF)' that manages assets according to the investor's expected retirement year. If the period until retirement is long, the fund actively manages by increasing the equity ratio, and as retirement approaches, it increases the bond ratio for stable management. The fund diversifies investments in domestic and international assets without separate management instructions until the retirement date.

Since TDFs launched domestically are pension products that must generate stable returns over the long term, they are operated with a focus on stability. In 2020, a past stock market boom year, the average return was 10.22%, lower than the KOSPI increase rate of 30.75%. In 2022, a stock market correction period, even though the KOSPI fell by 24.89%, the fund recorded a return of -14.76%, demonstrating relatively strong defense against declines. TDFs are designed to generate profits in rising markets and emphasize risk management through diversification in falling markets.

Korea Investment Trust Management holds two types of TDFs. The 'Korea Investment TDF Alseora Fund,' launched on March 7, 2017, actively pursues returns through global asset allocation. It is operated in collaboration with T. Rowe Price, a major U.S. pension specialist management company.

The 'Korea Investment TDF Alseora ETF Focus Fund,' launched on October 5 last year, is a product developed solely by Korea Investment Trust Management. It pursues low-cost investment from a long-term perspective of over 40 years. Considering the retirement date, it is an ultra-long-term investment product characterized by neutral asset allocation unaffected by economic ups and downs and low-cost investment to maximize long-term investment returns. However, both products are performance dividend-type products, and past returns do not guarantee future performance, and principal loss may occur depending on management results.

Park Hee-woon, Head of the Solutions Division at Korea Investment Trust Management, said, “It is now difficult to maintain the necessary funds stably after retirement with only the National Pension. By investing in TDFs that adjust the proportion of investment assets according to age groups through pension accounts on a regular savings basis, you can not only prepare for a stable old age but also receive tax deduction benefits as a bonus.”

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