The South Korean market for so-called target date funds (TDFs) shot up this year from 2016 as investors are keen to prepare for post-retirement life amid low interest rates, a market tracker said Friday.

According to fund researcher Zeroin, 37 TDF products with a net asset value of 1 billion won or more had a combined 378.7 billion won ($336 million) under their management as of Wednesday, more than seven times larger than the amount at the end of last year.

TDFs are aimed at providing people with a stable investment solution that automatically resets the asset mix in its portfolio according to the target date, usually retirement.

The top performer among the vehicles is a fund operated by Samsung Asset Management Co. that has attracted 190 billion won so far.

Market watchers said the local TDF market has huge growth potential as more people are interested in managing their assets more effectively amid a low-rate period to provide for life after retirement.

"The TDF market in the United States has been on a roll for more than 10 years on the back of systemic support," said Oh Won-seok, a senior strategist at Samsung Asset Management. "The local TDF market is very promising as it is still in its embryonic stage."

He added it is difficult for people to manage their assets profitably amid low market rates, so TDFs could emerge as a good alternative for preparing for after-retirement life.

South Korea remains gripped by fast population aging. It is predicted to become an aged society in 2017, with the ratio of people aged 65 and older hitting 14 percent of its 50 million population. Asia's fourth-largest economy is also projected to become a super-aged society in 2026, with the figure topping 20 percent. (Yonhap)