KakaoBank said on Tuesday that its target-switching fund product introduced in November reached its target return in 45 days after launch.

A target-switching fund is a product that automatically shifts managed assets from relatively risky assets such as stocks to safer assets such as bonds once it reaches a set target return. It can lock in gains while minimising risk in response to market volatility, drawing growing interest from investors.

KakaoBank’s first target-switching fund, launched in November and titled "Achieving a target return together with policy beneficiaries", reached its 6 percent target return in 45 days as its strategy of focusing investment on domestic policy beneficiary stocks proved effective.

Based on the first product’s successful achievement of its target, KakaoBank will sequentially introduce its second and third products and continue supplying funds tailored to market conditions and customer needs.

The second target-switching fund is titled "Achieving a 7 percent target together with ETFs". It is an EMP (ETF Managed Portfolio) fund that conducts diversified investment using ETFs (exchange-traded funds).

Until the target is reached, it invests more than 50 percent of assets in bond ETFs and less than 50 percent in equity ETFs, pursuing both stability and returns. It adjusts management depending on market changes and actively uses sector and theme ETFs expected to see sustained growth, along with KOSPI200 ETFs, to seek to achieve the target return.

Subscriptions are available until 5 p.m. on the 16th, and the target return is set at 7 percent, higher than the previous product. The minimum subscription amount is 1 million won, and once the target is reached it will switch to short-term financial assets to strengthen stability.

From the 19th, KakaoBank plans to sell its third target-switching fund product, titled "Reading the market and achieving a 7 percent target together".

KakaoBank said: "The management strategy of the first product, which quickly reflected market conditions, proved effective, allowing us to deliver returns to customers earlier than expected." It added: "We will continue to introduce competitive fund products that reflect market trends, and establish ourselves as a financial platform where customers can invest with confidence."