The Importance of Long-Term Investment and Periodic Asset Allocation
New Series Incorporates Expertise, Raising Performance Expectations
Amid a sharp decline in the New York stock market, Bae Jae-gyu, CEO of Korea Investment Trust Management, emphasized the importance of investing in Target Date Funds (TDFs).
On the 11th, at the 'ACE TDF ETF New Listing Commemorative Seminar' held at the Conrad Hotel in Yeouido, Yeongdeungpo-gu, Seoul, CEO Bae stated, "If you invest in individual stocks for a long period and endure volatility, you will become a patient rather than a wealthy person."
He explained, "If you had bought 100 million KRW worth of Apple stock when the iPhone was released in 2008 and held it until the end of 2023, you would have become wealthy," but added, "you would have experienced the Apple stock price dropping more than 30% from its peak more than six times." He continued, "If you had kept holding Apple stock, it would have been nerve-wracking," and "technology stock investors must endure significant volatility, but they can be shaken when stock prices plunge."
CEO Bae advised that since individual investors find it difficult to withstand market volatility, investing in products like TDFs is necessary. He added, "TDFs, which are managed autonomously by managers, can deteriorate over time," but emphasized, "Korea Investment Trust Management does not rely on managers' autonomous judgment during the long-term asset allocation process."
Following CEO Bae, Professor Kim Jang-ho from Korea University's Graduate School of Technology Management and Executive Director Kang Sung-soo, head of solutions at Korea Investment Trust Management, took the stage as presenters. Professor Kim is well known as an expert in investment analysis using asset allocation models. Executive Director Kang led the design of the ACE TDF ETF portfolio. This ETF series is managed based on the Long-Term Capital Market Assumptions (LTCMA) and a proprietary Glide Path, with Executive Director Kang leading the development of this methodology.
Professor Kim analyzed portfolio theory, asset allocation, and technological innovation for long-term investment. He explained the results of investment analysis using machine learning, AI, and large language models (LLM), as well as recent trends in asset allocation research. He stated, "Recent technological innovations have diversified investment analysis and decision-making models," and introduced, "To achieve successful long-term investment, it is important to maximize the compound effect and reduce downside risk through diversified asset allocation."
He also emphasized, "Since the optimal portfolio varies according to investor preferences, both the investment goal (Why) and method (How) are important," and stressed, "For the common investment goal of preparing retirement funds, long-term investment and asset allocation by period are most important."
Professor Kim further advised, "A strategic approach according to the investment period is necessary, and the most suitable investment product for efficient asset allocation is the TDF," adding, "TDFs have high investment utility as they can reflect personalized consumption goals through Glide Path design."
Executive Director Kang, who spoke next, introduced, "TDFs are attractive pension investment products with the convenience and simplicity of automatic risk adjustment," and described, "The newly launched ACE TDF ETF series combines the advantages of TDFs and ETFs."
He said, "They offer low costs, ease of trading, high liquidity, and transparent asset details," and added, "These products apply Korea Investment Trust Management's expertise using LTCMA, Glide Path, and portfolios optimized for Korean won investors." Furthermore, he explained, "They mainly diversify investments into U.S. growth stocks, domestic bonds, and gold," and noted, "Gold has a low correlation with stocks and offers superior real returns compared to bonds, so an asset allocation strategy actively utilizing gold will be applied."
The ACE TDF ETF series is a performance-distributing product, and principal loss may occur depending on management results.
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