Korea Investment Management announced on July 21 that it has launched KimRobo, a robo-advisor service for retirement pensions.
KimRobo is an algorithm-based service that automatically allocates assets according to investment goals. It is designed to help users efficiently manage their retirement pensions without requiring complex investment knowledge. The service features an algorithmic implementation of the management processes used by global asset allocation funds, such as Korea Investment TDF Araseo ETF Focus Fund and Korea Investment MySuper Araseo Fund, which have shown stable trends in the public retirement pension fund market.
The newly introduced KimRobo includes a total of four algorithms: ▲MulgaiGigi_MS_TAA_P ▲Mokpyosuyigrul_GG_TAA_P ▲Jusikbijunggohjung_GG_TAA_P ▲Mokpyobyundongsung_GG_TAA_P. Each algorithm constructs a portfolio tailored to the investor's risk profile and investment objectives.
According to the Koscom Robo-Advisor Testbed on July 18, as of the announcement date of the 22nd testbed on December 11, 2023, the 'MulgaiGigi_MS_TAA_P' algorithm ranked first (1.89) in the Sharpe ratio among stability-seeking models out of 163 algorithms eligible for retirement pension discretionary services. The Sharpe ratio is a representative risk-adjusted return indicator. KimRobo's algorithms have also shown strong performance in risk-neutral and aggressive investment categories.
Another feature of this service is that the algorithm names are intuitively structured so that investors can easily understand and select them. The investment objectives are clearly defined to help investors choose the appropriate algorithm, and the investment goal is included in the algorithm name for better understanding. For example, the 'MulgaiGigi' algorithm aims to achieve an excess return of 5% above the inflation rate.
KimRobo optimizes its portfolios based on the Long-Term Capital Market Assumptions (LTCMA) published annually by Korea Investment Management. The LTCMA provides data on returns and volatility by asset class, as well as correlations among asset classes, optimized for Korean won investors. Based on this, KimRobo applies stylized facts such as the advantage of foreign equity exposure over domestic equities and the superiority of domestic government bonds over foreign government bonds, thereby enhancing operational efficiency.
This service is available 24 hours a day through Korea Investment & Securities' Individual Retirement Pension (IRP) accounts. If users do not have an IRP account with Korea Investment & Securities, they can open one remotely and then use the service.
Kang Seongsu, Executive Director of the Solutions Division at Korea Investment Management, who oversaw the design and development of KimRobo, stated, "With KimRobo, ordinary retirement pension investors can now expect long-term returns comparable to those of professional investors," adding, "We will continue to refine the service so that anyone can manage their retirement pension easily and conveniently."
Meanwhile, past returns mentioned in this article do not guarantee future returns, and principal loss may occur depending on investment performance.
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