Aegis Asset Management Launches 'Rising K-REITs Fund'

Aegis Asset Management announced on the 9th that it will launch the ‘Aegis Rising K-REITs Fund,’ which selectively invests in domestic listed REITs (Real Estate Investment Trusts) that are on a growth trajectory.

This fund focuses on investing in the growing domestic listed REITs (K-REITs) market. It aims for stable dividends and capital gains from asset value appreciation by investing more than 50% of total assets in K-REITs. REITs are characterized by distributing more than 90% of their distributable income as dividends while also expecting an increase in the value of the underlying real estate assets.

Additionally, depending on market conditions, the fund adopts a strategy to flexibly adjust the investment ratio in diversified products such as infrastructure, real estate companies, and bonds to hedge against K-REITs volatility.

To build a portfolio across alternative investments, the fund holds up to 30% of shares in domestic listed infrastructure funds and real estate-related listed companies such as hotels, golf courses, and data centers.

Moreover, during periods of K-REITs overvaluation, the fund pursues a strategy to reduce volatility by actively realizing gains and investing up to 40% in short-term bond-type products.

The fund aims to proactively invest in the growing K-REITs market. As the government promotes REITs to expand indirect real estate investment opportunities for the public’s retirement security, the total market capitalization of K-REITs has grown from around 90 billion KRW in 2017 to approximately 7 trillion KRW last year.

However, compared to advanced REIT markets, there is still a long way to go. According to EPRA (European Public Real Estate Association), a global REIT index, as of the end of last year, the proportion of REITs relative to the stock market was in the 3% range for the U.S. and 2% range for Japan, whereas Korea’s was only about 0.3%. If the K-REITs market share grows to the level of the U.S., it could expand to approximately 70 trillion KRW.

The Aegis Asset Management Alternative Securities Investment Team, which manages this fund, is composed of professional managers with extensive investment know-how and research capabilities in REITs.

Since 2018, they have built a track record by managing private REIT funds over a long period and launched the first public fund investing in global REITs in 2020. Currently, they manage over 700 billion KRW in committed capital, investing in domestic and international REITs.

An Aegis Asset Management official stated, “The K-REITs market is experiencing both quantitative and qualitative growth due to government activation policies such as corporate tax exemption and low-rate separate taxation on dividend income. Since K-REITs stock prices are still undervalued relative to the value of underlying assets at this early growth stage, this is an important investment opportunity to capture the market.”

The fund is available for subscription starting today through NH Nonghyup Bank. Additionally, the company plans to continuously expand its sales channels in the future.

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