As the target date fund (TDF) exchange-traded fund (ETF) market has not achieved distinct results for three years, Mirae Asset Global Investments has entered this market as a latecomer. Unlike previous TDF ETFs where the capabilities of fund managers were essential, the strategy aims to target investor demand with a passive strategy following a benchmark index. There is keen interest in whether Mirae Asset Global Investments' approach will work in the sluggish TDF ETF market.
Mirae Asset Global Investments newly listed the 'TIGER TDF2045' ETF on the 25th. Considering that competitors like Samsung Asset Management, KB Asset Management, Hanwha Asset Management, and Kiwoom Asset Management launched TDF ETFs three years ago, Mirae Asset Global Investments has entered the competition quite late.
TDF is a fund that automatically adjusts the proportion of investment assets according to the investor's target retirement date. In the early stages of investment, it maintains a high proportion of risk assets, such as stocks, but as the retirement date approaches, it expands the proportion of safe assets like bonds. Until now, TDFs have been traded like public funds, but with their re-packaging into ETFs, the redemption cycle has shortened.
However, the market reaction to TDF ETFs has been lukewarm. The transaction volume of TDF ETFs accounts for less than 0.5% of the total ETFs across asset management companies. This year, of Samsung Asset Management's Kodex ETF's average daily transaction volume (266.1 million shares), TDF ETFs (222,177 shares) account for only 0.08%. Other asset management companies are in a similar situation. The transaction volume of TDF ETFs is 0.3% for KB Asset Management and Hanwha Asset Management, and 0.2% for Kiwoom Asset Management.
The sluggish transaction volume is interpreted as a result of the many substitute products available. TDF ETFs invest in multiple countries or corporations. While they are characterized by not being biased towards specific stocks, this also means they struggle to meet the tastes of investors who prefer individual stocks like Tesla and Nvidia.
Looking at Samsung Asset Management's TDF ETF, it includes investments in 'Vanguard Total World Stock (VT)', which invests in global stocks, as well as a mix of comprehensive bonds, government bonds, and short-term bonds. Korea Investment Trust Management's TDF ETF is composed of 'SPDR Portfolio S&P 500 Growth (SPYG)', which gathers growth stocks listed in the U.S., and comprehensive bonds.
The fact that products adjusting the proportion of stocks and bonds like TDF have already been launched in large numbers as ETFs also contributes to the indifference from investors. For example, there are products that mix nine bonds with single stocks like Samsung Electronics, Apple, Tesla, and Nvidia, as well as ETFs that hold U.S. representative indices like the Nasdaq 100 and bonds equally. Given the much broader selection available as ETFs, there seems to be no compelling reason for investors to invest specifically in TDFs.
Another reason cited for the failure to attract interest is that TDF and ETFs clash in terms of their nature. A relationship manager from an asset management company noted, 'Those seeking TDFs are passive investors who want to entrust everything to fund managers, whereas ETF investors tend to be active, studying and making their own judgments.'
To overcome these limitations, most asset management companies have approached TDF ETFs with an 'active' strategy. Active refers to the method where fund managers independently adjust the stock weight to aim for performance that exceeds market returns. However, this method has become a risk factor for existing TDF investors who prioritize stability and has resulted in a lack of predictability and transparency in portfolios for ETF investors.
In response, Mirae Asset Global Investments introduced a 'passive' strategy. The newly listed 'TIGER TDF2045' ETF is the only ETF among domestic and foreign listed TDF ETFs to adopt a passive strategy, consisting of the Standard & Poor's (S&P) 500 index and domestic bonds as its underlying assets.
This differs from previous TDF ETFs, where a variety of products made it impossible for investors to calculate their own revenue rates. By knowing the fluctuations in the S&P 500 index, foreign exchange rates, and bond yields, investors can calculate the revenue rate of the Mirae Asset Global Investments product.
Mirae Asset representatives explained that being able to invest 100% in retirement pensions is also a strength of this product. Retirement pension accounts can only contain 70% risk assets, but through the TIGER TDF2045 ETF, this can be increased to 93% due to its classification as a safe asset.
A representative from Mirae Asset Global Investments stated, 'From 2000 to 2025, the Morgan Stanley Capital International (MSCI) World Index rose by 335%, while the S&P 500 index surged by 508%, illustrating that the S&P 500 index is ideal for retirement investment products.'
Despite these differentiating factors, there are doubts in the market about whether a latecomer can achieve success. A contact in the asset management industry said, 'Investor funds focusing solely on the U.S. will likely flow in, but those not interested in that may not find it appealing.' Another contact commented, 'The desires of TDF and ETF investors are distinctly different, and it's uncertain whether these can be reconciled with a passive strategy. It won't be easy for TDF investors to transition to ETFs.'