[High Kick Han Stock Market] Untact and Bio... Post-Corona Trends in the Fund Market

[Asia Economy Reporter Eunmo Koo] As the social structural changes rapidly progress due to the novel coronavirus infection (COVID-19) crisis, winds of change are also blowing through the fund market. A representative phenomenon is asset management companies competing to launch funds that invest in industries leading the 'post-COVID' era, such as contactless (untact), bio, and internet sectors.

According to the related industry on the 19th, Hanwha Asset Management launched the 'Global Untact Fund' on the 1st, which invests in global stocks related to untact. This fund invests in high-quality domestic and foreign companies expected to benefit long-term as lifestyles shift toward contactless. Park Seong-geol, a manager at Hanwha Asset Management, explained, "As we pass through the COVID phase, the stock prices of untact-related companies are proving their worth through performance," adding, "Since this untact lifestyle will become more deeply embedded in our lives, investment in related companies is essential from a mid- to long-term perspective."

Mirae Asset Global Investments also launched the 'Global Next Normal Fund' on the 28th of last month, which invests in overseas untact-related companies. This fund focuses on themes arising from social structural changes such as the Fourth Industrial Revolution, contactless society, digitalization, e-commerce, disease overcoming, and health management. Mirae Asset stated, "We created this fund to analyze industries and trends that will lead the next 10 years and to find business models aligned with social structural flows to concentrate investments in related companies."

Although not a new fund, remodeling funds that change the composition of existing funds are also being launched. Shinhan BNP Paribas Asset Management remodeled the 'Good Morning Korea Fund' into the 'Korea New Economy Fund' on the 11th of last month. Shinhan BNP Paribas Asset Management said, "We are focusing on social structural changes such as shifts in the energy paradigm, continued low-interest rates, and changes in international relations, and investing in industries and stocks that can benefit from these changes," adding, "In particular, we attempted fund remodeling to find new investment opportunities for potential new subscribers as well as existing fund beneficiaries."

In addition, Samsung Asset Management introduced the 'Samsung Untact Korea Fund' on the 20th of last month by remodeling the existing 'Korea New Growth Industry Fund' to increase the proportion of untact consumption stocks such as Naver and Kakao, as well as 5th generation (5G) mobile communications and semiconductor stocks.

The asset management industry perceives the recent trend of asset management companies consecutively launching funds investing in industries expected to accelerate growth in the post-COVID era as a natural flow. Choi Ji-ho, manager of the Equity Management Team 2 at Shinhan BNP Paribas Asset Management, said, "From the perspective of asset management companies that must continuously create attractive investment products to attract investors amid increased investment options, it is a natural phenomenon to consecutively launch fund lineups investing in industries and stocks expected to benefit from recent structural changes."

However, caution against 'blind investment' that blindly chases trending themes remains valid in fund investment as well. Manager Choi warned, "Theme funds such as untact funds can actively respond to market conditions at the time of launch and generate profits accordingly, but their relatively high volatility and difficulty in risk management are drawbacks," urging caution. Kim Hoo-jung, a researcher at Yuanta Securities, also advised, "Theme funds that concentrate investments in promising fields can be opportunities for investors due to their narrow investment scope, but it should be kept in mind that for the same reason, they can also pose risks."

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