The Nation's First Mutual Fund Yielding 1200%... Long-Term Investment Is the Answer

[Asia Economy Reporter Junho Hwang] Mirae Asset Independence, established in 2001 and now over 20 years old, has recorded a return of 1200%. This is analyzed as a result of long-term investment centered on a model portfolio (MP) created based on in-house research.

According to FnGuide, a fund rating agency, among domestic active equity funds with assets under management exceeding 10 billion KRW, the fund with the highest cumulative return since inception is the Mirae Asset Independence Fund. Established on February 15, 2001, it has achieved a cumulative return of 1280.35% as of the closing price on the 5th. The Mirae Asset Discovery Fund, established in July of the same year, followed with 1182.07%.

The Mirae Asset Independence Fund was a fund that led the equity fund market by sparking a boom in equity funds at the time of its establishment. In early 2008, its assets under management nearly reached 2 trillion KRW.

The secret to the high returns lies in Mirae Asset Management's model portfolio (MP)-centered management system. Mirae Asset was the first asset management company to establish an in-house research division in 2006 and began operating a system centered on MPs. This division manages various MPs such as 'growth-type MPs' focused on earnings improvement or cash flow through bottom-up research, and 'style MPs' such as value stocks or healthcare. Each fund manager replicates about 70% of the MP corresponding to their fund type and exercises investment capabilities in the remaining portion.

Mirae Asset Management stated, "In the past, the most important factor determining fund performance was the subjective judgment of the fund manager, but now the asset management company's own research capabilities and the system based on it determine performance. This investment method provides a foundation for long-term investment in stocks once invested." They added, "When high-quality stocks are discovered and invested in long-term, turnover decreases, reducing indirect costs required for management, and the saved costs positively affect fund returns. This effect will be even greater in pension savings and retirement pension funds that invest long-term."