Hanwha Asset Management to Increase Allocation to U.S. Small-Cap Stocks and Emerging Markets... TDF Second-Half Strategy

Hanwha Asset Management announced plans to increase its allocation to U.S. small-cap stocks and emerging markets, citing continued expectations for growth across the artificial intelligence (AI) ecosystem in the second half of the year.

On July 14, Hanwha Asset Management released its second-half management strategy for its flagship retirement pension solution, the 'LIFEPLUS Target Date Fund (TDF)'.

The company forecast that growth expectations would persist across the entire AI ecosystem, including semiconductors, software, and infrastructure, throughout the second half. However, Hanwha Asset Management analyzed that market attention is shifting from simply following the 'AI theme' to identifying 'which companies are actually generating profits.' Accordingly, the trend to closely examine profitability changes by sector within the AI industry is expected to strengthen.

The core of the second-half management strategy, developed based on these forecasts, is to 'maintain an expanded equity allocation while pursuing balanced diversification.' The plan is to actively participate in growth momentum, but also to defend against the risk of funds concentrating in specific countries or large-cap stocks.

Cha Deokyoung, Head of Retirement Pension at Hanwha Asset Management, said, "It is time to participate in the profit momentum led by AI capital expenditures, but also to ensure balanced diversification across regions and market capitalizations."

For the U.S. market, the company will increase exposure to small-cap stocks. While the trend of capital flowing into AI infrastructure is expected to continue, the strategy is to expand the allocation to U.S. equities, but remain vigilant against the risk of excessive concentration in specific sectors or stocks. The approach is to broadly invest across small-cap stocks to capture upward momentum while diversifying risks.

To further diversify risk, the company will also focus on the Japanese market—where the end of yen weakness is anticipated alongside strong AI momentum—and especially on Asian emerging markets, which are at the center of the AI capital expenditure expansion.

Cha added, "The core of TDF is diversified investment through global asset allocation. Above all, it is important to deliver consistent long-term growth through this approach." He warned, "If funds are overly concentrated in a particular country or sector, the market may look attractive when those segments are performing well. However, if those markets stagnate in the future, it could hinder the long-term growth of investors' retirement assets."

LIFEPLUS TDF has delivered steady results based on a 'customized glide path' developed in close cooperation with global asset manager J.P. Morgan. In addition, the fund enhances investment efficiency through a hybrid strategy that flexibly applies active management to asset classes with high potential for excess returns, and passive management to asset classes where tracking the market index is more efficient.

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