Korea Investment & Securities and Mirae Asset Securities, selected as the first operators of integrated managed accounts (IMA), are expected to launch IMA products as early as early next month. An IMA is a new financial product offered by securities firms that guarantees principal while allowing investors to expect higher returns than bank deposits.
The financial authorities expect that when the two competing firms roll out their first offerings with great care, they will provide a variety of investment opportunities for financial consumers while also playing a major role in supplying venture capital.
The Financial Services Commission (FSC) said it held a regular meeting on the 19th and officially designated Korea Investment & Securities and Mirae Asset Securities as IMA operators. Immediately after the FSC's announcement, the two firms said they would launch related products as soon as possible, and the first offerings are expected to focus on stability rather than high returns.
IMA products are divided into three types by investment target and target rate of return: conservative at 4%–4.5% per year, standard at 5%–6% per year, and aggressive at 6%–8% per year. After fees, the conservative type is expected to be presented at 3.5%–3.7% per year, the standard type at 4.2%–4.9%, and the aggressive type at 4.8%–6.6%.
First, Korea Investment & Securities plans to launch a conservative product and then gradually expand the portfolio. It will operate mainly with domestic corporate finance assets such as corporate loans and acquisition financing, and will also invest in some high-growth equity securities to maximize returns.
Korea Investment & Securities has created a new organization of 12 dedicated personnel for the IMA business. It plans to expand the organization step by step while monitoring customer trends and the pace of funding.
Kim Seong-hwan, president of Korea Investment & Securities, said, "The introduction of IMAs will be an important turning point in providing customized asset management and stable investment opportunities," adding, "We will also contribute to revitalizing corporate finance and the growth of the capital market."
Mirae Asset Securities also said it will launch the first performance-linked IMA product and then expand the lineup to include dividend-type and project-type products that incorporate innovative growth corporations.
The company created a dedicated IMA headquarters in Oct. Kim Jeon-gyeong, head of the Trading Division at Mirae Asset Securities, said, "Because principal payments under IMAs are made on the credit of the securities firm, we will supply trustworthy IMA products to customers based on professional risk management and operational capabilities as a global investment specialist."
Mirae Asset Securities is focusing on gradually expanding balances rather than rapidly raising large sums in a short period through IMAs, advancing a customized asset management framework by risk appetite and maximizing synergy with the wealth management (WM) institutional sector.
An IMA is a performance-linked financial product with principal protection. It is not covered by deposit insurance like bank deposits, but because the securities firm guarantees principal, investors can earn operational performance gains on top of principal if they do not make an early withdrawal before maturity.
However, unlike commercial paper that pays a predetermined yield, the rate of return is determined by the investment target and operating performance. Korea Investment & Securities and Mirae Asset Securities, when launching IMA products, will present investment targets, risk grades, and benchmark returns through prospectuses.
The Financial Supervisory Service is reviewing the IMA product terms and prospectuses prepared by securities firms. It plans to support the launch of the products within the year.