Hanhwa Investment & Securities "'Korea Investment Didim CPI+ Fund Aims for Returns Exceeding Inflation Rate'"

"The Korea Investment Didim CPI+ Fund is a fund with the goal of generating excess returns compared to consumer prices."

Kang Seong-su, Executive Director in charge of Solutions at Korea Investment Trust Management. Photo by Yoo Hyun-seok

Kang Seong-su, Executive Director in charge of solutions at Korea Investment Trust Management, stated this goal at the 'Korea Investment Didim CPI+ Fund Launch Press Conference' held at the Korea Financial Investment Association on the afternoon of the 10th.

The conference introduced the 'Korea Investment Didim CPI+ Fund (Bond Mixed - Fund of Funds)' which was launched on the 25th of last month.

Kang Seong-su, the first presenter and the fund manager of the Korea Investment Didim CPI+ Fund, also manages the Korea Investment MySuper Alseo Fund series, which operates with the same master fund as this fund. Kang said, "Although the size of retirement pension reserves is rapidly increasing, the proportion of principal-guaranteed products is still very high," adding, "To secure real purchasing power after retirement, it is important to achieve returns higher than the inflation rate."

In particular, Kang plans to manage the fund based on three investment philosophies. He emphasized, "First, we will manage the risk-adjusted returns as they are and also utilize portfolio optimization. Lastly, we will invest with low costs."

The 'Korea Investment Didim CPI+ Fund' was designed using the master funds Korea Investment MySuper Income Fund and Korea Investment MySuper Yield Fund. Specifically, it holds about 55% in the income-type master fund and about 45% in the yield-type master fund.

The goal is to achieve returns higher than the CPI (the 5-year annualized increase rate of the Consumer Price Index). It referenced Australia's famous retirement pension product, 'MySuper.' The fund mainly focuses on domestic and international stocks and bonds. It also includes assets closely related to inflation such as gold, U.S. inflation-linked bonds, Australian listed stock ETFs, REITs, and infrastructure assets.

He said, "If consumer prices have risen significantly by the time of retirement, the actual usable retirement funds are limited," adding, "Testing Didim CPI+ showed excellent performance with a one-year return of 16.32%." He further emphasized, "It is fully possible to achieve the CPI+ fund's annual return target of 'inflation rate + 4.5%.'"

Beomjun Lee, Head of Pension Marketing Department, Korea Investment Trust Management. Photo by Hyunseok Yoo

The second presenter was Lee Beom-jun, Head of the Pension Marketing Department. Lee emphasized that the biggest differentiation of this fund is its portfolio tailored to Koreans. He said, "The Korea Investment Didim CPI+ Fund is characterized by being managed based on Korea Investment Management's own Long-Term Capital Market Assumptions (LTCMA)," adding, "We secured decades of data and tried to compose an optimized portfolio for Koreans by combining U.S. growth stocks expected to have excellent risk-adjusted performance with domestic bonds."

He also cited the low fees as an advantage. The annual fee for Korea Investment Didim CPI+ is 0.425%. He explained, "Because it mainly invests in ETFs in a fund-of-funds structure, the fee rate is low," adding, "Since the MySuper funds are also achieving the best performance among balanced funds, stable performance is expected."