Hanwha Asset Management "TDF2025, No.1 in 5-Year Retirement Pension Class Performance"

Hanwha Asset Management announced on the 27th that its target date fund (TDF) 'Hanwha LifePlus TDF 2025' ranked first in terms of returns over the past five years among retirement pension class products.

According to the fund rating agency KG Zeroin, as of the 19th, among retirement pension class products with over 10 billion KRW in assets under management and a '2025' vintage, the top-performing product over the past five years was 'Hanwha LifePlus TDF 2025,' with a return of 28.6%. The fund's year-to-date return was 9.6%.

'Hanwha LifePlus TDF 2025' is a bond-mixed fund, with approximately 60% allocated to bonds (including cash) and 40% to equities. By region, the fund is diversified globally with 49.4% in the U.S., 15.7% in Korea, 9% in emerging markets, and 6.3% in Europe, focusing primarily on the U.S. market. Hanwha Asset Management explains that the single TDF product allows for balanced investment across overseas stocks, overseas bonds, domestic stocks, domestic bonds, and REITs, providing sufficient asset allocation benefits.

The TDF can also be used as an option for the legally required 'safe assets' that must comprise at least 30% of DC-type or IRP-type retirement pension accounts. Recognized for its product stability, TDFs are excluded from the risk asset investment limit, and if they meet certain criteria as 'qualified TDFs,' they can be allocated up to 100% within retirement pension accounts.

According to the Financial Supervisory Service, as of the third quarter of 2023, retirement pension reserves reached 350 trillion KRW. Of this, DB-type accounts account for 54%, DC-type 26%, and IRP 20%, with DB-type still dominant. However, in terms of growth rates since the beginning of the year, DB-type grew by 0.7%, DC-type by 5.2%, and IRP by 9.0%, showing a sharp growth trend in DC and IRP accounts.

The growth of TDFs, which have established themselves as representative performance-based products in retirement pension accounts, is also notable. The proportion of TDFs among performance-based products (collective investment securities) in DC and IRP accounts has grown to about 30%.

Cha Deok-young, Head of the Pension Solutions Division at Hanwha Asset Management, said, "The bond-heavy assets in TDF 2025 are expected to deliver superior performance at this point as the interest rate cycle shifts from rising to falling. Investors can consider a 'Core and Satellite' strategy by positioning bond-heavy products like 'Hanwha LifePlus TDF 2025' as the core of asset management and adding equity funds or ETFs as satellites according to market themes or outlooks."