Korea Investment & Securities said that investments in exchange-traded funds (ETFs) through retirement pension accounts (defined contribution, individual retirement pension) have more than doubled in the past year as of the 23rd.
According to Korea Investment & Securities, the balance of defined contribution and individual retirement pension accounts, which was 5.8 trillion won at the end of 2023, increased to 8.4 trillion won by the end of last year. Among this, the amount invested in ETFs surged from 752.9 billion won to 1.7513 trillion won, approximately a 2.3 times increase.
The proportion of ETFs within the accounts rose from 13.0% to 20.9%. The investment share in Government Bonds also increased from 7.2% to 10.2%. In contrast, deposits decreased from 24.3% to 18.6%, and the shares of other principal-protected products, such as equity-linked derivative bonds (ELB) and repurchase agreements (RP), mostly decreased compared to the previous year.
This is interpreted as the result of an increasing number of investors seeking to enhance the revenue of their pension accounts through active management. According to estimates based on Korea Investment & Securities' non-face-to-face retirement pension accounts, ETFs achieved an average revenue of 11.0% based on their initial purchase price at the end of last year, while deposits only returned 3.2%.
Korea Investment & Securities noted, "We plan to launch discretionary products utilizing robo-advisors (RAs) and direct trading services for on-site bonds in the first half of this year," adding that "we will lead efforts to improve pension account revenue."