[Asia Economy Reporter Hwang Junho] Korea Investment Management announced on the 22nd that the recent 2-year return of 'Korea Investment TDF Alseora 2050 UH (Currency Exposure Type)' ranked first among all target date funds (TDF) 2050 vintages.
According to the fund rating agency FnGuide, as of the 19th, this TDF's 2-year return was 18.21% (based on C-Re class), the highest among 25 2050 vintage TDFs set up domestically. This fund also posted the best performance among all 2050 vintage TDFs in the 3-month return (5.87%) and 6-month return (0.91%). A TDF vintage refers to the year an investor is expected to retire, indicated by a four-digit number in the fund's name. For example, 'TDF 2050' is an optimal fund for investors planning to retire around 2050.
TDFs are pension-specialized products that set the investor's expected retirement year as the target date and optimally manage assets until that time. Asset allocation is essential for achieving stable long-term investment performance, and these products allow individual investors to invest by combining various asset classes such as global stocks and bonds in optimal proportions.
Min Sang-gu, Head of Solution Management at Korea Investment Management, emphasized, "It is difficult to predict the short-term direction of exchange rates, so it is impossible to know in advance whether investment returns will be higher with or without currency hedging. Ultimately, what investors can do is choose options that reduce risk."
He added, "The common belief that currency hedging necessarily lowers investment risk is not true, so when investing in funds, one should examine the currency hedging and currency exposure strategies. Especially for TDFs based on long-term investment, if the remaining period until retirement is long or if investors want to invest heavily in stocks, choosing the currency exposure type is a good way to reduce risk," he explained.
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