"Avoid Overconcentration in Domestic Stocks... Consistently Accumulate U.S. Index ETFs" [Retirement Pension Investment Strategy]②

Interview with Hyoyoung Jung, Head of Pension Consulting Division at Mirae Asset Securities
Adjusting Growth, Stability, and Income Allocations by Age Group Is Essential
Objective and High-Return Robo-Advisors Recommended
Mirae Asset, No. 1

"Since retirement benefits serve as an important means of wealth management and as a source of funds for later life, it is important to avoid investing everything in one place. Instead, asset allocation should be made based on one's current circumstances."

Hyoyoung Jung, Head of Pension Consulting Division at Mirae Asset Securities

Hyoyoung Jung, Head of Pension Consulting Division at Mirae Asset Securities, emphasized this retirement pension strategy in a recent interview with The Asia Business Daily.

She holds a positive outlook on the current strong performance of the domestic stock market, but noted that it is necessary to maintain a reasonable allocation to Korean equities. Jung stated, "The most frequent question these days is, 'With predictions that the KOSPI may reach 10,000 points, how should I approach my retirement pension strategy?' I believe the domestic stock market is not just buoyed by government expectations, but is rising on the back of corporate earnings, so I view it positively. I expect this market improvement to continue." She added, "In the past, the influence of the domestic stock market was less significant when building a portfolio, but now, the proportion of domestic equities is gradually increasing. Therefore, it is necessary to hold Korean stocks at a reasonable ratio."

However, she repeatedly stressed that one should not pursue a strategy of concentrated investment simply because the domestic stock market is performing well. Jung explained, "If you look at the products that many subscribers are purchasing recently, most of them are focused on domestic stock market products, with short-term investments in exchange-traded funds (ETFs) related to semiconductors, electric equipment, defense, and shipbuilding. This reflects current market trends," she said. "I am concerned about concentrating investments without asset allocation; so-called 'all-in' investing should be avoided."

Jung recommended a desirable retirement pension strategy of steadily accumulating U.S. index ETFs while allocating a portion to domestic equities. She said, "U.S. index-related ETFs still rank among the top holdings for pension subscribers," and explained, "Continuously accumulating ETFs centered on stable U.S. indices, while operating a certain portion in domestic assets, is the advisable approach." She further added, "Alternatively, using a target date fund (TDF) as the core of asset allocation and constructing momentum products as a 'satellite' can also be a good method."

Since retirement pension investment strategies should vary by age group, Jung recommended prearranging a portfolio and adjusting the allocation based on age. She said, "Rather than approaching each product separately by age, it is best to structure asset allocation into growth type, stability type (index-focused), and income type (dividend-focused) categories, and adjust allocations within those groups," adding, "After retirement, it is important to operate the portfolio in a way that allows for pension payments centered on distributions, while ensuring that the principal of the retirement pension is preserved."

Jung acknowledged that it is not easy for individuals to allocate assets themselves, and said that using asset allocation tools such as robo-advisors (RA) can be helpful in such cases. She explained, "It is indeed difficult for ordinary subscribers to decide what percentage of domestic stocks to hold when building an asset allocation portfolio. Robo-advisors use algorithms that reflect market signals and provide portfolios tailored to customer preferences. Because RAs suggest allocations based solely on market indicators, their recommendations are objective and have delivered strong returns."

Through the provision of various customized solutions such as robo-advisors, Mirae Asset Securities' pension assets surpassed 70 trillion won as of last April. Regarding Mirae Asset Securities' continued leading position in the pension market, Jung commented, "The pension industry is an infrastructure business that cannot be entered overnight. It requires intensive investment and ongoing maintenance in areas such as initial investment, assets, and IT systems before it can reach a certain trajectory and experience explosive growth. Mirae Asset Securities has shown continuous interest in pensions and has consistently invested in the pension business since its establishment," she said. "We have the largest dedicated retirement pension team in the industry, with 260 professionals, and have focused on global diversification since the early days of the business. This has led to higher medium- and long-term returns compared to other companies."

This content was produced with the assistance of AI translation services.