Korea Investment Trust Management Launches 'Korea Investment China IPO Fund'

[Asia Economy Reporter Koo Eun-mo] Korea Investment Trust Management announced on the 16th that it will launch the ‘Korea Investment China IPO Securities Investment Trust (Equity Mixed)’ (Korea Investment China IPO Investment Fund), which mainly invests in IPOs on China’s Kechuang Board (科創版).

This fund is a unit-type fund that cannot be subscribed to after a certain period and will be sold exclusively through Korea Investment & Securities from today until the 31st. The minimum subscription amount is 15 billion KRW, and if the minimum scale is not met, it will be converted and managed as a domestic bond-type fund.

The Kechuang Board is a stock market established by the Chinese government in July last year to support capital raising for technology innovation companies. As of the end of December last year, 70 stocks were listed, and compared to existing Chinese stock markets such as the Chuangye Board (創業版, Chasdaq), Main Board, and SME Board (中小板), it features a larger number of listed stocks and a higher institutional allocation ratio.

The ‘Korea Investment China IPO Investment Fund’ invests in IPOs newly listed on stock markets such as the Kechuang Board, Chuangye Board, Main Board, and SME Board. As of last year, the average stock price increase rate of IPOs listed in China was about 144% (market cap weighted average, based on the highest price within 90 days after listing of 196 stocks). Korea Investment Trust Management’s Shanghai office, which has been conducting continuous research locally in Shanghai since 2011, plays a role in selecting IPOs.

Institutional investors must hold at least 60 million yuan in stock securities on the Shanghai Stock Exchange and 10 million yuan on the Shenzhen Stock Exchange, totaling 70 million yuan, to subscribe to Chinese IPOs. The ‘Korea Investment China IPO Investment Fund’ holds stock securities of index constituent stocks such as Shanghai-Shenzhen 300 (CSI300) and Shanghai 50 (SSE50) and employs a strategy of selling futures of these index stocks to minimize volatility from stock securities investment and enhance stability.

A representative from Korea Investment Trust Management said, “Although the existing Chinese IPO market showed high stock price increases after listing, investment was limited due to low allocation ratios and a lack of listed stocks. After the new opening of the Kechuang Board, the number of listed stocks has increased and the institutional investor allocation rate has improved, making Chinese IPOs an attractive investment destination with expected high returns.”

The ‘Korea Investment China IPO Investment Fund’ charges a front-end sales fee of 1% and an annual total fee of 1.2% for Class A. Class C has no front-end sales fee and an annual total fee of 1.72%.

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