Hanwha Asset Management Co., a brokerage unit of South Korean conglomerate Hanwha Group, has joined hands with global investment banking giant JPMorgan Asset Management Co. to venture into the fast-growing target-date fund market in Korea.
According to financial industry sources on Thursday, Hanwha Asset Management will launch its first target-date fund in partnership with JPMorgan as early as next month.
The target-date fund is a type of mutual funds that automatically adjusts the mix of high-risk and low-risk assets in its investment portfolio according to pre-determined timeframe such as retirement. For example, the fund is designed to include a relatively high portion of stocks when the investor is young then resets the mix to contain less risky assets such as bonds near his or her retirement.
The target-date fund was first introduced in Korea last year and has grown sharply to become a nearly 500 billion won ($447 million) market as of today. It is already a very popular mutual fund in the United States with assets in the target-date funds topping $880 billion by the end of 2016.
JPMorgan is one of America’s top five target-date mutual fund managers and its expertise and system in asset management is expected to help Hanwha Asset Management catch up its rivals that have already rolled out similar products in the Korean market, said an unnamed Hanwha Asset Management official. The company expects its partnership with JPMorgan would create a synergy effect.
Korea’s major asset managers are competitively rushing into the fast-growing target-date fund market in partnership with American target-date fund specialists. KB Asset Management Co. joined hands with Vanguard, Korea Investment Management Co. with T. Rowe Price, and Samsung Asset Management Co. with Capital Group.
Other Korean fund managers including Shinhan BNP Paribas Asset Management, Mirae Asset Global Investments Co., and Kiwoom Asset Management Co. are also selling target-date funds.
By Hong Jang-won and Cho Jeehyun
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