F&DataLab "'Default Option' High-Risk Grade Up to 8.9%p Difference"

The year-to-date returns of high-risk grade portfolios applying the default option system to boost retirement pension yields showed a difference of up to 8.9 percentage points. When expanded to the entire portfolio of default options, the gap widened to 12.7 percentage points.

F&Data Lab announced on the 26th that this result came from jointly calculating the returns, risks, and individual fund performances of default options with the fund rating agency FnGuide.

F&Data Lab measured the performance of a total of 94 funds with year-to-date returns (29 high-risk grade, 30 medium-risk grade, 16 low-risk grade, and 19 ultra-low-risk grade). Despite the relatively short management period, the return gap between portfolios was quite large. The difference is likely to widen as the investment period lengthens.

Seo Won-woo, CEO of F&Data Lab, said, “The full-scale introduction of the default option system will signal genuine operational competition among providers and asset managers in the retirement pension market going forward. Since workers’ portfolio choices are directly linked to their retirement pension investment returns, more careful investment decision-making by workers is needed now more than ever.”

The average year-to-date return for the high-risk grade was 10.32%. During the same period, the highest return portfolio recorded 14.51%, while the lowest was 5.63%. The medium-risk grade averaged 6.65%, and the low-risk grade 4.2%. The ultra-low-risk grade, which invests in fixed deposits and similar instruments, recorded a relatively low return of 1.96%. The main reason for the return differences by grade was the rising stock market. During the same period, the KOSPI rose by 16.69%.

Specifically, looking at the return distribution by risk grade, all high-risk grade portfolios recorded returns above 5%. Medium-risk grade portfolios achieved returns above 3%, and except for one portfolio, low-risk grade portfolios also posted returns above 3%.

Meanwhile, portfolio risk, expressed as the standard deviation (annualized) of return volatility, was generally in the 5?10% range for high-risk grade portfolios, similar to the mixed-type general public funds. Medium-risk grade portfolios showed risk levels around 3?7%. Some medium-risk grade portfolios exhibited risk levels comparable to high-risk grade portfolios when measured by standard deviation.

The total number of funds invested in default options currently stands at 359 (including duplicates). Among them, Mirae Asset Global Investments and Samsung Asset Management accounted for 37.4% and 11.5%, respectively, nearly half of the total. They were followed by Hanwha Asset Management at 10.3%, KB Asset Management at 8.1%, and Kiwoom Asset Management at 7.8%.

When simply averaging the year-to-date returns of funds included in the high-risk grade by asset management company, KB Asset Management, with 15 funds (including duplicates), recorded the highest at 12.85%. Hanwha Asset Management with 16 funds followed at 11.94%, and Shinhan Asset Management with 6 funds at 11.81%. Mirae Asset Global Investments and Samsung Asset Management included 45 and 15 funds, respectively, with returns of 8.14% and 10.09%.

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