Growing Appetite for Risk Assets and Rising Popularity of Mixed ETFs in Retirement Pension Market
This year, for the first time, the reserve of principal-protected products in South Korea’s retirement pension market decreased, reaching 363.55 trillion won. This shift is attributed to a growing number of subscribers increasing their exposure to risk assets, such as equity funds and ETFs, highlighting a structural movement of funds from safe assets towards performance-dividend products. The expansion of performance-dividend products signals not just a temporary trend but a long-term structural change in the overall portfolio composition of retirement pension products.
Driven by a bullish domestic stock market and robust performance in the semiconductor sector, mixed-asset ETFs—combining stocks and bonds—are gaining remarkable traction. The popularity of these products is further fueled by investors keen to leverage regulatory investment limits within pension accounts to increase their allocation to equities. Recently launched mixed ETFs, which include diverse stocks such as Samsung Electronics and SK Hynix, allow pension accounts to boost equity weightings up to approximately 85%. As a result, the trend towards performance-oriented and higher-risk investment solutions is expected to further reshape the pension market, with mixed ETFs poised to become a central investment strategy.
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