Target date funds grow 55 pct in 2025: data

TDFs-growth

Target date funds grow 55 pct in 2025: data

SEOUL, March 31 (Yonhap) -- The South Korean market for so-called target date funds (TDFs) rose 55 percent from a year earlier in 2025 amid growing public awareness of post-retirement life, the financial watchdog said Tuesday.

The net asset value of TDF products reached 25.6 trillion won (US$16.8 billion) at the end of last year, sharply up from 16.5 trillion won a year ago, according to the Financial Supervisory Service (FSS).

As an investment vehicle designed for post-retirement life, TDFs aim to provide subscribers with a stable investment solution that automatically resets the asset mix in its portfolio based on target dates, usually retirement.

Inflows from retirement pensions and private pensions accounted for 95 percent of the net asset value, and TDFs logged a 13.7 percent return last year, far higher than retirement pension funds' 6.5 percent gain, according to the watchdog.

The local TDF market had drawn little interest from investors for years since its introduction in 2011, but the tide began to turn in 2021, with its net asset value topping the 10 trillion-won mark for the first time.

The rapid growth was ascribed to escalating concerns over the state pension fund running dry and the country's quickly aging population.

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