OCIO funds gain traction among retail investors

NH-Amundi Asset Management Co.’s Allright Earth OCIO Asset Allocation Securities fund [Image source: NH-Amundi Asset Management]

Demand for funds managed by outsourced investment managers are on a rise as investors prefer less risky, high profit funds through portfolio diversification.

According to financial market tracker FnGuide on Sunday, 89.3 billion won ($72.7 million) flowed into NH-Amundi Asset Management Co.’s Allright Earth OCIO Asset Allocation Securities fund in the past month, the largest amount among equity funds except exchange traded funds (ETFs).

An OCIO fund, which integrates outsourced chief investment officer (OCIO) form, or outsourced investment management, manages institutional investor assets such as of pension funds and large corporations. It also comes in public offering for individual and corporate investors.

KB Asset Management Co.’s Target Return Conservative OCIO fund also attracted 38.6 billion won in funds despite the sluggish public offering fund market. The firm manages three OCIO funds in three types - conservative, growth, and aggressive. The conservative fund is the largest among OCIO funds in Korea that aims to raise 4 percent in annual profit.

The size of Samsung Retirement Pension OCIO Solution Balanced fund is the second-largest at 110.3 billion won, followed by NH-Amundi’s Allright Earth fund at 104.8 billion won. The Samsung fund had the highest profit rate of 6.5 percent in the last three months.

OCIO funds diversify investment in various assets including domestic and foreign bonds, equity funds, alternative assets, and ETFs. The diversification reduces risk.

NH-Amundi Asset Management’s Allright Earth OCIO fund aims for an annual average profit of 5 percent.

“The fund focuses on investments in environment, social and governance (ESG) sector,” said an unnamed official from NH-Amundi Asset Management. “We adjust the investment share according to market conditions.”

Demand for OCIO funds has grown as asset managers also offer the investment in public offering for individuals.