Principal wins back-to-back awards for Target Date provident fund, highlights diversification strategy, sets 33% AUM growth target

Principal (formerly known as CIMB-Principal) demonstrated its Target Date provident fund management prowess, winning 2017’s and 2018’s top awards for pooled funds with AUM under THB 10 billion arranged by Association of Provident Fund (AOP). It highlighted its strong position as an effective retirement planner who manages automatic rebalancing mechanisms to ensure suitability for each fund member’s age and diversifies away risks through asset allocation, using the investment ideas of Principal Financial Group, a global leader in fund management. It expects to grow the total AUM of its Target Date provident fund to approximately THB 8 billion, a 33% increase, in 2019.
MRS. PAJAREE PUNYASHTHITI, Executive Vice President, Business Development - Provident Fund & Private Fund, Principal Assert Management Co., Ltd. (“Principal”) revealed that thanks to Principal great dedication to manage the Registered Provident Fund of Principal Target Date Retirement (Target Date Fund)to build the fund members’ retirement nest egg prudently, Target Date Fund managed by Principal, has recently earned the Grand Prize Winner Award 2018 with the recognition of achievement plaque from Her Royal Highest Princess Maha Chakri Sirindhorn for pooled fund with assets under management (AUM) under THB 10 billion at the 7th Provident Funds Conference (2018), held by AOP, after receiving the same award for 2017.

The award confirms the sheer efficiency achieved in managing the fund, which passes the criteria in such areas as management structure, role in the improvement of the members’ potential or dependability for retirement. Using the management ideas from Principal Financial Group, a world-class US-based pension fund house, Target Date Fund will allow a member to choose his or her age-based retirement investment options from the beginning and the fund manager will then pick the asset classes for them, placing a focus on asset allocation, investing the fund money in a variety of asset classes (e.g. bonds, cash, domestic and international stocks, gold, REITs), automatically rebalancing the long-term investment portfolio to ensure suitability for the member’s age range and providing investment plans for retirees.

“Our policy is to be more than an asset management company. We serve as the clients’ advisor for retirement planning, providing them with investment advice, knowledge, seminars and planning tools and offering them the enhanced flexibility in tracking the funds’ performances, calculating their retirement nest egg from the investment plan and contribution rate chosen and changing the plan and rate on our website, all with the aim to enable them to reach their retirement goals” she said.

The Executive Vice President added that the total AUM of Principal’s Target Date Fund currently stand at approximately THB 6 billion, the largest among its peers and an approximately 50% growth from about THB 4 billion in 2017.

For 2019, the AUM is projected to grow 33% to approximately THB 8 billion. This can be achieved by careful fund and risk management to efficiently create opportunities for the fund members to enjoy decent returns and attain their retirement goals. They can track the funds’ performances on Principal’s website.

“In addition to the Target Date Fund themselves, we also offer ancillary services to keep the employers and the employees well-informed about investment. For example, we provide the Consultative Model, advising the employers on how to analyse and select contribution rates and investment plans. We calculate the Average Replacement Ratio for the organisation-wide employees. We introduce the Plan WISE Retire WELL online platform, with which a fund member can calculate their expected retirement nest egg from the plan and contribution rate chosen as well as the post-retirement withdrawal rate based on their assumptions. Those are very useful tools for retirement planning” noted she.

Investor should study the characteristics of the products (funds) and the associated conditions, expected returns and risks before deciding to invest.
Past performances do not guarantee similar results in the future.