RA investments shine amid volatile markets

17 algorithms post gains as Kospi, Kosdaq slide

Investors in their 50s and 60s embrace AI-driven domestic stock strategies

[Created using ChatGPT]
[Created using ChatGPT]

The Kospi and Kosdaq fell 11.55 percent and 27.49 percent, respectively, over the past three months. In contrast, 17 robo-advisor algorithms for domestic-asset retirement pension investments posted positive returns over the same period, with the top performer reaching a gain of 14.6 percent.

AI-driven retirement pension products are drawing attention for their performance amid the sharp swings roiling domestic equity markets. As the underlying algorithms grow more sophisticated, they are proving effective at defending returns even in highly volatile conditions.

According to the Koscom testbed, the top-performing actively managed retirement pension robo-advisor algorithm among 152 commercially available products — as of Friday — was Quantec Korea Growth Sector Select P, which posted a one-year return of 81.49 percent.

Samsung Securities' Samsung Retirement Robo ETF P ranked second with a return of 68.35 percent over the same period. NH Investment's NH DNA Retirement Pension SmartX P (44.46 percent) and December & Company's Ecomode Active 3 (42.93 percent) also delivered returns exceeding 40 percent.

Robo-advisor investments are widely regarded as particularly well-suited to highly volatile markets. The algorithms are built around asset allocation and diversified investment strategies, and by removing human emotion from the decision-making process, they help curb panic selling and other emotionally driven behavior. Industry observers say this makes them especially useful at a time when concerns about volatility in domestic equities have been mounting.

"In the third quarter, stock market volatility is likely to increase due to concerns about a slowdown in the global semiconductor industry cycle and the prolonged US-Iran war," an industry official said. "Robo-advisor algorithms with a higher weighting in domestic and overseas safe assets are expected to deliver relatively strong investment performance."

Data compiled through December & Company, which operates the AI investment management platform Fint, show that investors in their 50s and 60s now account for about 40 percent of all Fint subscribers. That age group's share surged from 3 percent at end-2019 to about 30 percent by end-2021 — a roughly tenfold increase in two years — and has held at around 40 percent since 2024, representing a more than thirteenfold rise over roughly five years.

"In the early days after launch, Fint's core customer base was people in their 20s and 30s who were comfortable with mobile services," a Fint official said. "But as markets turned volatile, middle-aged and older investors looking to put money into domestic stocks began flocking to the platform at a rapid pace."

Robo-advisor services handle the entire investment process on behalf of clients — from stock selection to buying and selling and regular portfolio rebalancing — all driven by AI tailored to each investor's risk profile. The services are drawing strong demand from middle-aged and older investors who find it burdensome to monitor markets constantly or spend time picking individual stocks.

Demand for AI investment management is also spreading to pension assets, which require long-term oversight. Investors in their 50s and 60s account for 47 percent of all subscribers to Fint's individual retirement pension discretionary management service, approaching half the total. Retirement pension robo-advisor investing is currently available only through individual retirement pension accounts.

Fint, which became the first domestic provider of an AI investment management service when it launched in April 2019, had total assets under management of approximately 566.6 billion won ($407 million) as of June, giving it a roughly 36.2 percent share of the retirement pension robo-advisor market. It currently provides customized asset management solutions to NH NongHyup Bank, KB Kookmin Bank, Industrial Bank of Korea, and BNK Busan and Kyongnam Bank.


forest@heraldcorp.com