Currently, the investment plan and amounts for each account (1 year) are as follows:

Account	KODEX S&P500TR (379800 )	KODEX NASDAQ 100TR (379810)	KODEX TDF2050 Active (434060)	Total (Unit : KRW)
Pension Saving Fund	7.5M (50%)	7.5M (50%)	–	15M(100%)
IRP	2.1M (70%)	–	0.9M (30%)	3M (100%)
ISA	10M (50%)	10M (50%)	–	20M (100%)
Total	19.6M	17.5M	0.9M	38M

US Market Selection and Concentration

As you can see, the investment portfolio is divided equally between the US market’s S&P 500 and Nasdaq 100. The plan is to systematically invest in a couple of stocks each month, considering that the US market is expected to maintain a long-term upward trend. Initially, I also considered investing in emerging markets, but when I questioned whether I could confidently make additional bets when it drops by 50%, I realized that I couldn’t. Considering the risk of that market, I adjusted my portfolio to focus on the US market. By investing half in the S&P 500 and half in the Nasdaq 100, I aimed to boost the average annual growth rate of the Nasdaq 100. Historically, the nominal average return of the S&P 500 has been 8-10%, with a standard deviation of 15%. On the other hand, the Nasdaq 100 has shown a nominal average return of 15%+, with a standard deviation of 25%. As I plan to invest for more than 20 years, a standard deviation of around 25% for the Nasdaq 100 is acceptable. For those who wonder what the standard deviation means in this case, fluctuations within a 25% range over a year can be considered normal.

ETF

As Mr. John Bogle mentioned, the most crucial factors in investing are taxes and management fees. To reduce the tax burden, we utilize the pension savings account for investment, which solves the first issue. The second concern is management fees, as most mutual funds charge 1% to 3% annually in management fees. To guarantee at least the level of the S&P 500’s returns, it should show an annual return of 9% to 13%. However, it is widely known that 90% of active funds in the US market perform worse than passive funds (index investments). Index investments, especially ETFs, have very low management fees. For instance, KODEX ETF charges 0.05% management fee as of the time of writing. Therefore, I believe there is no need to consider other investment options apart from ETFs.

TR (Total Return) vs PR (Price Return)

When investing in ETFs, you may come across TR (Total Return) or PR (Price Return) in their names. PR distributes dividends to investors, usually on a quarterly basis. TR, on the other hand, reinvests the dividends, reflecting them in the ETF’s price (Net Asset Value or NAV). When investing in a regular account, a 15.4% tax is levied on dividend income. However, if you invest in a TR ETF, there is no tax on dividend income as it is reinvested and reflected in the price, resulting in tax savings. Nonetheless, when investing through the pension savings account, the transaction difference and dividends can be subject to deferred taxation. Hence, the difference between PR and TR is not significant. It can also be inconvenient to reinvest dividends and may result in remaining funds that cannot be invested. For convenience, I invest in TR ETFs.

H (Hedge) vs UH (Unhedged)

Similar to TR/PR, some ETFs have (H) in their names, indicating that they are currency-hedged ETFs, while others without (H) are understood as Unhedged ETFs. When investing in UH ETFs, the management fees tend to increase when currency hedging is involved. UH ETFs usually show similar effects to investing in the US dollar, providing a defensive effect against a global downturn or crisis when the dollar strengthens. Conversely, if the opposite occurs, I believe individual Korean stocks I invested in may perform well.

IRP Safe Asset 30%

Although I am not enthusiastic about investing in IRP accounts, it is mandatory to invest 30% in safe assets. Safe assets generally include bonds, deposits, etc., with significantly lower returns compared to the stock market. Fortunately, TDF (Target Dated Fund) ETFs are classified as safe assets, and I am currently investing in them. The ETF’s composition is as follows:

As you can see, a whopping 76.28% of total assets are invested in the stock market. The label “2050” indicates the asset allocation under the assumption of retiring in 2050. Since there are still 27 years left until retirement, the stock market’s investment proportion is significant, but it is expected to decrease over time. Although I have not decided yet, when the stock investment proportion for 2050 decreases, I anticipate investing in the 2055 ETF if it is launched.