Hanwha Asset Management, No.1 Growth in Default Option TDF This Year

Default Option TDF Balance Up 227% Since Beginning of Year
Managed with Advisory Partnership with JP Morgan
Features 'Hybrid Management' and 'Differentiated Currency Strategy'

Hanwha Asset Management announced on the 27th that the balance of the 'Hanwha LIFEPLUS Target Date Fund (TDF)' included in this year's default option (pre-designated operation system) showed the highest growth rate compared to competitors.

According to the Korea Financial Investment Association, as of the 24th, Hanwha Asset Management's default option TDF balance increased by 227% compared to the beginning of the year. Hanwha Asset Management's default option TDF balance rose from approximately 45.2 billion KRW at the beginning of the year to 148.2 billion KRW on the 24th. This statistic was compiled for asset management companies with default option TDF assets under management of 10 billion KRW or more based on accumulated funds.

This is interpreted as Hanwha Asset Management's TDF being chosen by various retirement pension providers (default option sellers) and retirement pension subscribers. The default option refers to managing retirement pensions (DC·IRP type) with pre-designated qualified investment products when subscribers do not provide specific management instructions. Each retirement pension provider, including banks, securities firms, and insurance companies, constructs default option portfolios by incorporating various products such as asset management companies' TDFs and BF funds (Balanced Funds).

A TDF is a fund that automatically adjusts its portfolio according to the life cycle. When an investor sets a retirement date, the fund initially invests aggressively in assets like stocks to seek returns according to the asset allocation curve (Glide Path), and as the retirement date approaches, it gradually increases the proportion of safer assets such as bonds to focus on preserving assets.

Hanwha Asset Management continues its differentiated approach by managing TDFs with advice supported by global research capabilities and asset allocation expertise based on a partnership with JP Morgan, a world-leading house. Through a 'hybrid management strategy' that selects active or passive management methods according to the characteristics of investment regions and assets, and a 'differentiated currency strategy' that applies different currency open and hedging strategies by asset, it has shown strong long-term performance over three years.

For assets such as emerging market stocks or corporate bonds, where information asymmetry makes it relatively easier to generate alpha, an active management strategy is applied to maximize returns. Conversely, for asset classes like large-cap U.S. stocks or government bonds, where index replication is easy and stock selection impact is minimal, a passive management strategy is used to minimize costs and improve investment efficiency.

Cha Deok-young, Head of the Pension Solutions Division at Hanwha Asset Management, said, "Hanwha LIFEPLUS TDF will continue to pursue a historically proven asset allocation strategy stably while adhering to a reasonable glide path for asset allocation."

Hanwha Asset Management was selected by a total of 20 retirement pension providers at the time of the Ministry of Employment and Labor's final approval of the default option in 2022, achieving results by being included in 37 portfolios and ranking second in TDF size, delivering a 'surprise performance' relative to fund size.

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