November 28, 2024

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A printed advertisement showing Mirae Asset Global Investments' No.1 position in TDF market share. (Mirae Asset Global Investments)

Mirae Asset Global Investments has gobbled up nearly half of target-date fund market share, recording 3.5 trillion won ($2.84 billion) under management as of the end of 2022.

TDF refers to an investment scheme where a portfolio’s asset allocation mix automatically rebalances throughout an account holder’s lifecycle to make it less prone to volatility as the target date draws near.

Analysts attributed Mirae Asset's top position to the group's chairman, Park Hyun-joo, who has emphasized the pension business since its foundation. The Lifecycle Fund series, similar to TDF products, has been operated since 2011. It has developed methods using global asset allocation and various investment means suitable for long-term products like pensions.

As a result, the Mirae Asset Strategy Allocation TDF ranked first in three-year and five-year long-term returns as of the end of 2022 in categories for 2025, 2030 and others.

Thanks to its methods and investment infrastructure for life-cycle operations, the Mirae Asset subsidiary has become the only operator that has adhered to its own operations since the beginning of TDF introduction. Using its own glide path, this type of management increases the returns for investors, as it eliminates fees paid to the consignment management company.

The TDF market is expected to grow further due to the retirement pension default option system introduced last year. The system allows workers to automatically operate their reserves in a predetermined management method if they do not decide on financial products.

Among the eligible default option products approved by the Ministry of Employment and Labor in July last year, Mirae Asset Global Investments’ products took up half. This is the only figure in the industry, and their TDF products also have the largest number as well, listed on 96 approved products.

"The pension management methods by Mirae Asset Group's long-term acquisition of the pension business for more than 20 years seems to have led to the quality of the product," an industry watcher said.

By Kim So-yeon (sera13@heraldcorp.com)