2024-03-02 17:23:57
Analyzing Mirae Asset IRP account
There is a surge in investment in U.S. technology stock ETFs.
Products containing the top 10 Nasdaq companies
Recorded 84% return last year alone
Operation changes according to the life cycle
A lot of money is pouring into TDF products too.
The secret to the success of pension experts who achieved annual returns of up to 52% was bold investment without fear of loss.
In 2022, pension investors’ portfolios were concentrated on principal-guaranteed products due to the sluggish global stock market. However, last year’s top pension experts were able to receive good report cards thanks to their thorough focus on aggressive investments centered on stocks.
As a result of analyzing the accounts that recorded the top 1% of returns among Mirae Asset Securities’ Individual Retirement Pension (IRP) subscribers by year, the proportion of investments in cash, deposits, and stock-linked derivative bonds (ELB), which reached 70% as of the end of 2022, was It plummeted to 9% at the end of last year.
Conversely, 80% of the investments in these accounts were concentrated in stock-focused ETFs. The top ETFs they hold the most include U.S. technology stocks and U.S. index ETFs. As of 2022, US-related ETFs were only 2 of the top 10 ETFs by balance, but by the end of 2023, the number had increased to 7.
Last year, he boldly bet on the U.S. stock market, which was experiencing a bull market in which related stocks were soaring due to the boom in related industries, and benefited greatly from it.
The product with the largest amount of balance among pension experts is the TIGER US Tech TOP 10 INDXX ETF. It invested in the top 10 stocks by market capitalization among major tech companies listed on the U.S. Nasdaq, including Microsoft, Apple, and NVIDIA, and recorded a return of 83.81% last year. In addition, super experts also invested in ETFs containing domestic semiconductor companies such as TIGER Fn Semiconductor TOP10 and TIGER Semiconductor.
In the case of funds with the second highest investment proportion (10%) following ETFs, target date funds (TDFs) ranked 1st to 10th in terms of balance. TDF is called a retirement pension customized fund that ensures both profitability and stability by managing the fund manager by automatically adjusting the proportion of investment in risky assets (stocks) and safe assets (bonds) according to the worker’s retirement date.
Choi Jong-jin, head of the pension division at Mirae Asset Securities, said, “Retirement pension experts do not focus on investing in a few stocks or betting on one market, but aim for long-term and stable investment through global asset allocation.” He added, “Continuing to increase returns through savings investments is also noteworthy.” He said.
As the number of investors who place importance on profitability in retirement pensions is increasing, the increasing use of securities company IRP accounts, which can demonstrate the most active investment strategies among financial companies, is also a notable phenomenon.
IRP is a retirement pension system that allows workers to freely subscribe while working and continue to accumulate and operate the retirement benefits received upon retirement. Any employed person with income can join. It is a ‘tax-deductible’ product that is eligible for a tax deduction of up to 9 million won, which is half of the annual payment limit of 18 million won. There is an increasing trend in the number of young investors who are currently working as well as those who are regarding to retire.
According to the Financial Supervisory Service, the IRP reserves of the entire financial sector, including banking, insurance, and securities, in the fourth quarter of last year amounted to KRW 75.6186 trillion, an increase of KRW 18.011 trillion in one year. In order of size, banks are larger at KRW 49.3946 trillion than securities companies (KRW 22.1888 trillion), but securities firms’ reserves are growing rapidly.
With an IRP account at a securities company, investors can freely choose and invest in a variety of products, including general public funds, ETFs, target date funds (TDFs), REITs, and equity-linked securities (ELS). In particular, real-time trading is not possible with bank accounts that allow investment in similar products, whereas ETFs can be bought and sold at any time like stocks with securities accounts.
This is why consumers who want to invest more actively are flocking to accounts at securities firms.
As investors who moved to IRP accounts at securities companies bet on risky products aiming for high returns, the difference in returns between non-guaranteed principal and interest guaranteed products at securities companies was found to be significant.
In fact, in the case of Yuanta Securities, which had the highest non-guaranteed rate of return among all financial companies at 18.26% as of the end of last year, the difference with the guaranteed rate of return product (4.28%) was more than four times.
The asset management industry agrees that the attractiveness of the domestic stock market must be increased through ‘corporate value up programs’ so that the retirement pension balances of active investors rapidly flowing into IRPs can be used as a priming force to grow the domestic stock market.
Key indicators, including the price-to-book ratio (PBR), must be improved and corporate profitability must be increased so that domestic retirement pension account holders can also recognize investing in Korean stocks as another option to increase returns.
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