Shinhan Didim Global EMP Fund Pursues Inflation Rate +3% Returns... Another Growth in Retirement Pension Market

Shinhan Asset Management Holds Press Conference for 'Shinhan Didim Global EMP Fund'

"Shinhan Asset Management, as a leading first-generation TDF operator with continuous performance achievements in the default option BF sector, will strive to achieve further growth in the retirement pension market through the Didim Fund."

Kim Chung-sun, Executive Vice President (CMO) of Marketing Division at Shinhan Asset Management. Photo by Yoo Hyun-seok

On the morning of the 7th, Kim Chung-sun, Executive Vice President (CMO) of Shinhan Asset Management's Marketing Division, announced this goal at the press conference for the 'Shinhan Didim Global EMP Fund' held at the Korea Financial Investment Association in Yeouido.

The press conference, held in a relay format by a total of 21 companies from this day until the 22nd, is an opportunity to introduce detailed information and differentiated characteristics of each asset management company's individual Didim Fund products. Shinhan Asset Management was the first to kick off the event.

Executive Vice President Kim said, "The retirement pension market is rapidly growing, but funds are concentrated in principal-guaranteed products, resulting in relatively low returns. The basic concept of the Didim Fund is to pursue higher returns compared to principal-guaranteed products."

The 'Shinhan Didim Global EMP Fund' introduced by Shinhan Asset Management is a remodeled product of the existing 'Shinhan TRF Growth OCIO Solution Fund' to meet the Didim Fund requirements. The TRF (Target Return Fund) strategy sets an investor's target return and executes an asset allocation strategy to achieve it. This aligns significantly with the purpose of pension products, which require long-term performance exceeding inflation.

Oh Gyuchan, Head of Global Investment Management Division at Shinhan Asset Management. Photo by Yoo Hyunseok

This fund is a global EMP (ETF Managed Portfolio) fund that maximizes risk diversification effects. It has already demonstrated verified performance of over 28% in two years. It mainly invests in overseas stocks and domestic bonds. It also invests in domestic stocks, overseas bonds, and alternative assets, aiming to achieve an annual return exceeding the inflation rate plus 3%.

Specifically, the portfolio allocation by asset is △overseas stocks 40%, △domestic stocks 5%, △domestic bonds 45%, △overseas bonds 5%, and △cash and alternative assets 5%. Shinhan Asset Management emphasizes that simulations with various portfolios showed this asset allocation to be the best in terms of performance.

Oh Kyu-chan, Head of Global Investment Management at Shinhan Asset Management, said, "For a long time, the portfolio has been composed mainly of overseas stocks and domestic bonds within the major trends of asset allocation. Simulation results show an annual return of 8.11% and annual volatility of 6.46% from 2011 to May 31 of this year."

For overseas stocks, Shinhan Asset Management composed the portfolio mainly of U.S. stable income (interest and dividends) dividend stocks and high-quality (financially sound companies) style stocks. He emphasized, "When entering a rotation phase following the start of U.S. interest rate cuts, we will adjust the portfolio according to market conditions. Domestic stocks will be selectively invested reflecting major themes."

Domestic bonds will be invested in a balanced manner between short-term bonds under one year and 10-year long-term government bonds. The plan is to implement strategies suited to market conditions to generate excess returns. Overseas bonds will focus on U.S. medium- to long-term bonds, considering U.S. interest rate cuts. Alternative assets will also be composed mainly of REITs and high-yield income assets expected to benefit from interest rate cuts.

Executive Vice President Kim Chung-sun said, "Shinhan Asset Management has shown high interest by participating in the TF from the early stages of the Didim Fund," adding, "We will strive to firmly establish the Shinhan Didim Global EMP Fund in the market and contribute to market development."