The two AMs signed a strategic partnership agreement last October to develop products and capabilities in South Korea.
The six target date funds have various retirement target years and they comprise 11 different underlying funds managed by Capital Group.
Each fund will be using a mix of asset classes according to Korean investors’ retirement age, life expectancy, wage growth rates and average age of entry into the workforce. The allocation will be more conservative over time.
Samsung AM CEO Sung-hoon Koo said guaranteed products as well as insurance-type products, which dominate the Korean retirement pension market, “will not be able to support the retirement needs of Koreans through stable income with appropriate diversification” under the current environment of low interest rates and low growth.
Products with guaranteed principal and interest represent 89% of the pension market in Korea.
But the size of the country’s TDF market is very small, with KRW7.5 bn ($6.6m) of assets under management.
Capital Group International chairman Shaw Wagener hopes TDFs will become an important long-term retirement savings tool to address income needs for the aging population.
Seoul-based Samsung Asset Management has $165.7bn in AUM.
US-based Capital Group manages $1.4trn globally. In Asia, the firm currently has 18 funds available for sale in Hong Kong and Singapore.
