By Lee Hyo-sik
Staff Reporter

An increasing number of retail investors are putting money into ''wrap accounts,'' a comprehensive asset management account at brokerage firms, as these products have outperformed most equity funds this year.

According to the securities firms, ''Master Wrap Focus,'' a wrap account product managed by Daewoo Investment & Securities, has recorded 107 percent returns for the past one year, while ''Core+2'' at Woori Investment & Securities posted a 67 percent return.

In comparison, the equity fund managed by Tongyang Investment & Securities, which posted the highest rate of returns among all domestic equity funds on the market, recorded a 67 percent return for the past year. Most other top equity funds at Mirae Asset Securities and other brokers generated an average 47 percent return rate.

Investors can structure portfolios of wrap accounts in accordance with their investment tendency, while investment consultants at brokers provide customers with comprehensive advice on stock picks and management. If investors are risk averse, then they can put money into wrap account products that primarily invest in bonds and other safer financial products.

If one is inclined to take more risks for high returns, he or she can subscribe to wrap account products investing in equities and futures products.

Wrap account products are also gaining popularity among investors as they can deposit a relatively small amount of money in accounts and the fund management fees are fixed, ranging from 1 to 2 percent of assets under management. In most cases, wrap fees are either similar or lower than those charged on equity funds.

The Master Wrap Focus at Daewoo Investment & Securities primarily invests in shares of distressed companies or those being targeted for merger and acquisition (M&A) in pursuit of high returns at high risks.

Woori Investment & Securities's wrap account Core+2 invests in stocks of 20 blue chip companies, including POSCO and Shinsegae.

''Wrap account products are ideal for investors with small amounts of money and the fund managers target fewer stocks. So they are more flexible to cope with the rapidly changing market environment in a timely manner, compared with large-scale equity funds,'' said an analyst at Woori Investment & Securities.

He said investors inclined to take risks have realized high returns through wrap account products over the past year amid the bullish stock market.

leehs@koreatimes.co.kr