KB Asset Management's Recommended 'Inflation Response Products'

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[Asia Economy Reporter Hwang Junho] KB Asset Management recommended seven products including four types of commodities, two types of high-dividend, and one bond inverse product during the inflation phase.

First, for exchange-traded funds (ETFs) expected to benefit from rising oil prices, they cited KBSTAR US S&P Oil Producers ETF, KB Commodity Special Asset Fund, KBSTAR Palladium Futures Special Asset ETF, and KB Star Gold Special Asset Fund.

KBSTAR US S&P Oil Producers is a product whose yield rose up to 45% since the beginning of the year as the Russia-Ukraine war prolonged. The KB Commodity Special Asset Fund tracks a Korean-style commodity index composed of three sectors: energy, metals, and agricultural products, recording a year-to-date return of 35.62%. KBSTAR Palladium ETF, the only ETF investing in palladium in the domestic market, and KB Star Gold Special Asset Fund investing in gold futures are also expected to benefit from rising commodity prices.

For high-dividend related products, they recommended KBSTAR High Dividend ETF, which mainly invests in large-cap stocks with high dividend yields, and KBSTAR 200 High Dividend Covered Call ATM ETF, which pursues high income through stocks of KOSPI 200 and 50 high-dividend stocks combined with call options. High-dividend ETFs have relatively lower volatility than individual stocks, allowing for diversified investment. Especially in a down market, their decline is not as steep as general stocks, limiting losses while providing stable income through dividends. The recent six-month returns of the two products are 1.86% and 8.39%, respectively, showing higher returns compared to KOSPI's (-12.18%).

Usually, high-dividend ETFs distribute dividends in the first week of May based on the last trading day of April. The current price adjustment due to ex-dividend can be seen as an opportune time for investors who want to invest during the price correction period. KB Asset Management also viewed that during a period of rising interest rates, a 'bond inverse ETF' that seeks profits when bond prices fall due to selling of government bond futures can be a good response strategy.

Lee Seokhee, Executive Director of KB Asset Management's Pension WM Headquarters, said, "Recently, more customers have lost investment destinations amid increased volatility due to interest rate hikes and market uncertainty caused by inflation," adding, "The seven funds recommended by KB Asset Management are investable products during the inflation phase and will be good investment tools."

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