"5G Tongsinmang Bogeupdan-gae, Jigeum-i Tuja Jeokgi"

Interview with Kim Jong-hyeop, Head of Strategy Operations Team at Kiwoom Asset Management
'Kiwoom Global 5G Next Generation Network Fund', Korea's First Public Fund Investing in Global 5G-Related Stocks

[Asia Economy Reporter Eunmo Koo] "Our imagination regarding the utilization of 5th generation (5G) mobile communication technology is still limited. We must not miss investment opportunities by being trapped in the currently imaginable future."

Jonghyup Kim, Head of Strategy Operations Team at Kiwoom Investment Asset Management (photo), emphasized in an interview with Asia Economy on the 5th that the current stage of 5G mobile communication distribution is the right time to invest in 5G. Kim said, "When 4G was distributed from 2013 to 2015, the stock prices of related companies recorded impressive increases based on expectations of rising demand," adding, "5G, which is still being distributed in many countries, will lead to similar results."

The 'Kiwoom Global 5G Next Generation Network Fund (5G Fund)', managed by Kim, is the first public offering fund in Korea that invests in global 5G-related stocks, launched in February 2018. Although there are competitive and liquid 5G and Internet of Things (IoT) related companies domestically, the number of companies and the scope of technology are somewhat limited to form a fund solely with them, so the investment targets were expanded to global companies.

Kim expressed confidence that the 5G Fund is an attractive product even amid the recent remarkable rise of passive funds. Unlike 5G-themed Exchange Traded Funds (ETFs) that operate without active rebalancing, the 5G Fund can flexibly adjust its portfolio according to the stage of 5G adoption. Kim stated, "We will respond by adjusting weights for stocks where continuous demand is uncertain or where market expectations are excessively reflected in stock prices, depending on the progress of 5G adoption."

Currently, the fund is increasing the proportion of semiconductor and telecommunication equipment companies, which are expected to see concentrated demand during the introduction of 5G networks. Kim explained, "Since the introduction of 5G networks is expected to continue until 2022, related industries will continuously benefit," adding, "When the benefits are deemed to be exhausted, the portfolio will gradually be restructured to focus on companies utilizing 5G networks."

Regarding the recent impact of the novel coronavirus disease (COVID-19), Kim diagnosed, "Market concerns related to COVID-19 can be summarized as supply chain disruption and weakened consumer sentiment," and added, "Concerns about production processes due to supply chain disruption have somewhat eased as factories in China resumed production." He continued, "The problem remains the demand contraction caused by the still valid deterioration of consumer sentiment, and to minimize this impact, the portfolio has been diversified into telecommunications, base station REITs, and media."

Kim emphasized, "We aim for an annual return of 10-15%," and added, "We hope investors choose products suitable for their risk tolerance and manageable risk profiles." As of the 4th, the 5G Fund recorded a cumulative return of 31.6%. During the same period, the fund's net asset value totaled 90.5 billion KRW.

This content was produced with the assistance of AI translation services.