Original Article by Korean Newspaper ‘Yonhap Infomax’, 9th Nov. 2022 https://news.einfomax.co.kr/news/articleView.html?idxno=4241395

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Direct indexing is gaining attention in the financial industry as discussions on introducing financial investment income tax are underway in the political sector. Direct indexing, a personalized portfolio service reflecting an individual's investment preferences, is gradually gaining popularity as an attractive means to take advantage of tax savings.

On May 9th, according to the financial investment industry, both AI-based fintech companies and major asset management firms are preparing for direct indexing services.

Direct indexing is a kind of asset management service that allows individuals to create their desired index and automatically operate it. It is designed to provide customized portfolio services that reflect an individual's investment tendencies.

Earlier in August, Doomoolmori, a fintech company, introduced a stock investment customization solution called 'Tailor'. This service allows investors to manage stocks within their portfolio by utilizing big data and algorithms to reflect their investment preferences.

Asset management firms are also showing proactive involvement in direct indexing.

In April, Hanwha Asset Management declared its entry into direct indexing during the recapitalization, becoming the first among asset management companies. KB Asset Management ㅗhas also identified direct indexing as a new growth engine and is now developing related systems with a goal to commercialize it next year.

Recently, Mirae Asset Global Investments has also announced plans for a personalized asset management service called 'QPMS (Quant Portfolio Management System)' that includes direct indexing.

One of the reasons that the financial investment industry is focusing on direct indexing is its potential for ‘Tax-saving’.