"Flexible Management of Samsung Electronics Weight"...Hantoo Asset Management Changes Samsung Group Stock Fund Operation Strategy

[Asia Economy Reporter Hwang Yoon-joo] Korea Investment Management announced on the 3rd that it has reorganized the management strategy of the Korea Investment Samsung Group Fund to increase the effective investment ratio in Samsung Electronics to around 30% by utilizing stock futures.

According to the Capital Markets Act, the maximum limit for a fund to include Samsung Electronics in its stock holdings is up to the proportion of Samsung Electronics in the market capitalization (21.5% as of the end of last month).

However, the fund can increase the effective investment ratio in a specific stock by using derivatives such as futures within 10% of its net assets. Korea Investment Management plans to actively employ an active strategy within the scope allowed for public funds to maximize returns.

The Korea Investment Samsung Group Fund invests in 16 Samsung Group stocks spread across 13 industries including Information Technology (IT), finance, media & services, industrials, bio, and services. Although Samsung Group is a single group, it is a corporate group with well-diversified industries.

The Korea Investment Samsung Group Fund determines the investment rating and investment ratio of the 16 Samsung Group stocks based on fundamentals (profitability), market capitalization, industry outlook, and financial structure. The core of this process is the ‘Samsung Group Stock Investment Committee,’ composed of the head of the equity management division, the fund manager in charge, and the research team.

Before the reorganization of the management strategy, all 16 Samsung Group stocks were included in the fund, but going forward, stocks with relatively low investment attractiveness at certain times may be excluded. The aim is to achieve excess returns compared to the market by flexibly adjusting the investment ratio in strategic stocks based on qualitative and quantitative fundamental analysis, which is the strength of active funds.

Established in 2004 as Korea’s first Samsung Group stock fund, the 'Korea Investment Samsung Group Installment Fund' has been recognized as optimal for installment investments due to its long-term performance exceeding market returns.

According to FnGuide, the return of the ‘Korea Investment Samsung Group Installment Fund No.1 (C5)’ from its inception date (November 2, 2004) to the end of last month was 361.2%, outperforming the KOSPI TR index’s increase of 300.5% during the same period by about 60 percentage points.

The Korea Investment Samsung Group Fund especially showed high performance during rebounds after sharp declines. Representative periods include 2008-2011, when a rebound followed the sharp drop caused by the global financial crisis, and 2016-2018, when the market corrected due to U.S. interest rate hikes and the U.S.-China trade dispute before rebounding. The performance of the Samsung Group stock fund was higher compared to the KOSPI index, which represents the overall domestic stock market, and it was analyzed that holding more Samsung Electronics shares could realize even higher returns.

The fund management team has also been strengthened. Choi Won-jun, who has researched and analyzed Samsung Group-related stocks for over five years in the equity management division’s research team, will co-manage this fund together with the existing lead manager Kim Hyo-chan.

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