Hanhwa Investment & Securities Asset Management Shortens Redemption Periods for Two Public Funds to Enhance Investor Convenience

Korea Investment Trust Management announced on the 16th that it has shortened the redemption cycle for two public offering funds to enhance investor convenience. The products with shortened redemption cycles are the ‘Korea Investment Global Good Company ESG Fund’ and the ‘Korea Investment U.S. Dividend Aristocrats Fund.’

With this change, the redemption cycles of the Korea Investment Global Good Company ESG Fund and the Korea Investment U.S. Dividend Aristocrats Fund have been shortened by 5 business days and 4 business days, respectively. Previously, investors could receive redemption proceeds in 9 business days after applying for redemption, but the redemption cycle has now been reduced by about half. The redemption cycle of the Korea Investment Global Good Company ESG Fund (4 business days) is the shortest among domestic public offering funds investing in overseas assets. The redemption price is also applied based on 3 business days from the redemption application date.

The reason the redemption cycle of the Korea Investment Global Good Company ESG Fund could be shortened is due to changing the main investment target from overseas-listed exchange-traded funds (ETFs) to domestically listed ETFs. Generally, funds investing in overseas assets have longer redemption cycles than those investing in domestic assets due to time differences with the respective countries. Recently, as domestic ESG products investing in global ESG stocks have diversified, the fund strategically increased the proportion of domestically listed ETFs.

To shorten the redemption cycle, the Korea Investment Global Good Company ESG Fund conducted portfolio adjustment (rebalancing) on the 5th. Among the rebalanced portfolio, ETFs with high ESG indices such as sustainability and social responsibility included ▲iShares MSCI ACWI Low Carbon Target ETF (18.09%) ▲ACE G2 Electric Vehicle & Autonomous Driving Active ETF (11.63%) ▲First Trust NASDAQ Technology Dividend Index Fund (4.50%). Individual stocks included ▲Ecolab (2.18%) ▲First Solar (2.18%) ▲Republic Services (1.51%). According to Harvard Business School and JP Morgan, portfolios of companies with high ESG ratings have achieved excess returns compared to other portfolios.

The Korea Investment U.S. Dividend Aristocrats Fund was able to shorten the redemption cycle through optimization of its own systems and processes. Improvements in cash settlement processing and holiday operations reduced the time required to sell and liquidate the fund. Top holdings of the Korea Investment U.S. Dividend Aristocrats Fund include major U.S. dividend growth stocks that have continuously increased dividends for over 25 years, such as ▲McDonald’s (1.5%) ▲Johnson & Johnson (1.4%) ▲Coca-Cola (1.4%) ▲ExxonMobil (1.3%).

Choi Min-gyu, Head of Global Equity Management at Korea Investment Trust Management, said, “Public offering funds have longer redemption cycles compared to ETFs and stocks, which caused inconvenience for investors when liquidating assets. The shortening of the redemption cycle was achieved through Korea Investment Trust Management’s commitment to improving investor satisfaction, including portfolio adjustments for the Korea Investment Global Good Company ESG Fund and optimization of operating systems and processes for the Korea Investment U.S. Dividend Aristocrats Fund.” He added, “We will continue efforts to enhance the competitiveness of public offering funds.”

Meanwhile, the ‘Korea Investment Global Good Company ESG Fund’ and the ‘Korea Investment U.S. Dividend Aristocrats Fund’ are performance dividend-type products, and principal loss may occur depending on the management results.

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