Hyundai Investment Asset Management Launches Hybrid Index Fund

Published 25 Aug.2020 13:31(KST)

[Asia Economy Reporter Minji Lee] Hyundai Investment Asset Management announced on the 25th that it has launched the Index Alpha Bond Mixed Type No.1 Fund.

This fund is a mixed index fund that invests 30% of the trust assets in a KOSPI200 tracking index portfolio, and the remainder in a passive bond portfolio with a duration of about 3 years. An index fund refers to a fund managed with the goal of achieving the market average return.

In the long term, index funds yield higher returns than active equity funds. As of the 24th, looking at the recent 5-year returns in the domestic equity sector, KOSPI200 index funds have recorded an average return of 48.41%, while active equity funds have recorded an average return of 6.71%.

The target customers for the Index Alpha Bond Mixed Type No.1 are community financial institutions such as Saemaeul Geumgo and credit unions. Due to their internal regulations, community financial institutions cannot subscribe to funds with an equity allocation exceeding 30%. Most index funds on the market are equity index funds that allow up to 100% equity allocation, limiting access for community financial institutions.

The company expects that since less than 30% of the trust assets are invested in the equity index portfolio, community financial institutions will be able to enjoy the excellent investment efficiency of the index portfolio. Additionally, it is anticipated that this fund could be an alternative for conservative individual investors who find equity products burdensome.

Hansung Jo, CEO of Hyundai Investment Asset Management, said, “By managing both the equity portfolio and the non-equity portfolio based on a passive strategy, we can pursue investment efficiency more effectively and also expect excess returns during the rebalancing process.”