Pension holders last year were found to have about 80% of their accounts in overseas equity exchange-traded funds (ETFs).
On the 14th, Korea Investment & Securities noted that an analysis of its customer accounts showed the investment ratio in overseas equity ETFs among the top 5% of pension revenue earners was 79.1%.
The most invested indices were the Nasdaq 100 (25.8%) and the Standard & Poor's (S&P) 500 (23.9%), while the next highest was in the U.S. tech sector ETF (12.7%). The investment ratio in ETFs focused on individual stocks like Tesla and NVIDIA was 10.3%.
Overall, there is a growing trend in overseas equity ETF investments. The ratio of overseas equity ETFs, which was 49.6% at the end of 2023, increased to 55.1% by the end of last year. During the same period, the investment ratio in bond ETFs rose from 14.5% to 20.3%, while domestic equity ETF investments dropped from 29.1% to 14.2%.
Kim Soon-sil, head of the retirement pension operation division at Korea Investment & Securities, explained, "The rapid increase in the asset size of ETFs within defined contribution (DC) and individual retirement pension (IRP) accounts is due to their high expected revenue compared to other asset classes and their good liquidity."