Gwangju Bank, Leading Bank in Discretionary ISA Major MP Returns

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Gwangju Bank (President Song Jong-wook) announced on the 20th that the average returns of high-risk and medium-risk model portfolios (MP) among discretionary Individual Savings Account (ISA) model portfolios ranked first among banks.

According to the returns of discretionary ISA as of the end of February 2021 disclosed by the Korea Financial Investment Association, Gwangju Bank recorded a return of 51.08% for the high-risk MP, 33.31% for the medium-risk MP, and 14.72% for the low-risk MP. The average returns of high-risk and medium-risk MPs ranked first among banks, while the low-risk MP ranked second.

Gwangju Bank explained that this was the result of adopting a diversified investment strategy in developed and emerging markets and a long-term investment strategy in growth sectors rather than focusing on the domestic market when establishing asset allocation strategies.

Additionally, the continuous rise of major developed country stock markets such as the United States and the fact that assets related to the Fourth Industrial Revolution recorded returns exceeding 100% after inclusion contributed to achieving these results.

Jang Jin-seop, head of the WM Business Department at Gwangju Bank, said, “The results in returns reflect the global diversification strategy following the recovery of the world economy, increased allocation to high-growth industries, and continuous risk management. Also, rebalancing to short-term bonds since the end of last year to reduce bond interest rate risks influenced the improvement in returns.”

Meanwhile, discretionary ISA (Individual Savings Account) is a comprehensive asset management tax-benefit product that integrates and manages various asset portfolios in a single account. It pursues profitability and stability through expert product management and diversified investment in a low-interest era, while offering a customized product capable of flexible response to dynamic financial market changes.

With the passage of the discretionary ISA system improvement bill in the National Assembly last year, eligibility conditions have been significantly relaxed. From this year, domestic residents can subscribe even without income (income verification is required for those under 19), and sunset abolition, maturity extension, and rollover of unpaid amounts are allowed, making it a more advantageous tax-exempt product for investors.

ISA products are currently the only investment products among financial products on sale that enjoy tax-exempt benefits and are gaining attention. The government also aims to increase household asset growth using these products, so various additional benefits are expected to be added to ISA products in the future.