"Uncertain Stock Market Next Year, Opportunities Must Be Found in IPO Funds"

Interview with Kim Seung-hyun, Head of TI Operations at Feynman Asset Management

Seunghyun Kim, Head of TI Operations at Feynman Asset Management (Provided by Feynman Asset Management)

[Asia Economy Reporter Minwoo Lee] "In a situation where the U.S. Federal Reserve's (Fed) tapering (asset purchase reduction) is in full swing and inflationary pressures persist, securing stable returns through public offering stock funds is important."

Seunghyun Kim, Head of TI Operations at Fineman Asset Management, who leads traditional asset investments such as stocks and bonds, emphasized this point. He explained that public offering stock funds, which can allocate 20 to 25 times more shares compared to individual participation, are particularly advantageous.

The confidence is backed by past performance. According to financial information provider FnGuide on the 15th, Fineman Asset Management’s flagship product, the ‘Fineman Star Public Offering Stock Securities Investment Trust (Bond Mixed Type) (hereafter Star Public Offering Fund),’ posted a year-to-date return of 9.98% as of the previous day. This ranks among the top funds targeting purely domestic public offering stocks. Considering that the KOSPI and KOSDAQ returns during the same period were 1.48% and 2.58%, respectively, the fund outperformed the market by about 4 to 6 times. It is evaluated that the fund secured stability by maintaining a high-quality bond ratio of over half and captured profitability by selectively investing in promising public offering stocks.

Kim cited the fund size, consistent participation in public offerings, and meticulous market strategy as strengths. He explained, "The current fund size is about 50 billion to 120 billion KRW. If the size is too large, participation becomes difficult, and if too small, there are limits to share allocation. Participating with a size around 100 billion KRW was effective."

Consistent participation in the public offering market is also a differentiating factor. Kim emphasized, "Since not all public offering stocks generate profits, avoiding unstable stocks while entering as much as possible is key to the public offering stock fund’s returns. This fund has gained trust from public offering entities by consistently participating in various public offerings since its inception in 2014."

Capturing ‘big fish’ is also crucial. SK Bioscience, which ranks second in subscription deposit size historically, boosted the fund’s overall return by nearly 3%. Other large stocks such as Kakao Games and Kakao Pay were also appropriately targeted. Careful attention was paid to letting go of ‘big fish’ as well. Kim explained, "We closely examined index inclusion potential, shareholding structure, and supply-demand conflicts after market listing. For SK Bioscience, we monitored after the lock-up period ended and sold at about 10% higher than at the time of lock-up release. For Kakao Pay, setting the lock-up period to one month instead of six months improved profitability."

He predicted that next year, when many ‘big fish’ are gathered, could be a great opportunity. LG Energy Solution, scheduled to list in January next year, is expected to have a market capitalization of up to 80 trillion KRW. Additionally, public offerings in the trillion-KRW range from companies like Hyundai Engineering and SSG.com are pending.

Going forward, there are plans to launch products combining REITs and initial public offerings (IPOs). They are also considering EMP funds that diversify investments across various exchange-traded funds (ETFs) and exchange-traded notes (ETNs).

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