Hantoo Asset Management Holds the Largest Domestic Lineup of Undervalued Value Stock Funds

Korea Investment Trust Management announced on the 8th that it holds the largest lineup of undervalued value stock funds with high shareholder return rates among domestic asset management companies.

Funds with high shareholder return rates refer to products that include companies with a high return on equity (ROE) of over 10% but a low price-to-book ratio (PBR). These funds have recently gained attention as the government announced the promotion of a 'Value-Up Program' to enhance corporate value. Currently, there are a total of 19 undervalued value stock funds launched domestically, of which Korea Investment Trust Management holds six.

The six funds consist of five public funds?▲Korea Investment Small Value Fund ▲Korea Investment Long-Term Value Fund ▲Korea Investment Reverse Fund ▲Korea Investment Dividend Leader Fund ▲Korea Investment Small Growth Fund?and one exchange-traded fund (ETF), the ACE Shareholder Return Value Active ETF.

The Korea Investment Small Value Fund is the only small-cap value stock fund in Korea. It primarily invests in companies expected to increase their shareholder return rates in the future. The selected stocks are companies with excellent earnings and capital quality and have the potential to transition from value stocks to growth stocks. The management team and internal research organization analyze data from over 1,000 companies and conduct more than 200 company visits annually.

The Korea Investment Long-Term Value Fund invests by mixing large-cap and mid- to small-cap stocks to maintain stable returns over the long term. It allocates 30% each to large-cap and mid-cap stocks, and 10% and 20% to small-cap and KOSDAQ stocks respectively, maintaining a mid- to small-cap stock ratio of over 60%. The strategy focuses on investing in undervalued companies with strong unique competitiveness within their industries and selling overvalued stocks to pursue long-term profits.

The Korea Investment Reverse Fund, Korea Investment Small Growth Fund, and Korea Investment Dividend Leader Fund, all recognized as shareholder return funds, are managed by Kim Ki-baek, head of the Korea Investment Trust Management Small Value Team and a second-generation value investment fund manager. The Korea Investment Reverse Fund focuses on the gap between current stock prices and corporate value, the Korea Investment Small Growth Fund targets leading stocks expected to drive the market in the mid to long term, and the Korea Investment Dividend Leader Fund invests in lesser-known stocks with high dividend yields.

The ACE Shareholder Return Value Active ETF is Korea’s first ETF to incorporate the keyword 'shareholder return' in its product name. It invests in undervalued companies with potential for improved capital quality through future dividend increases, share buybacks, and cancellations. According to the Korea Exchange, as of February when the Value-Up Program was announced, the average daily trading volume was 1.19975 billion KRW, an increase of more than 60 times compared to the 18.63 million KRW average daily trading volume in January.

The six undervalued value stock funds of Korea Investment Trust Management have outperformed their benchmark indices (BM). The recent one-year returns of the six funds exceed their BMs by 5.91 to 16.59 percentage points. Extending the period since inception, the gap widens to 15.94 to 140.19 percentage points.

Team leader Kim Ki-baek said, "I manage funds with the belief that a good fund is one that has low volatility in returns and shows an upward trend over the long term," adding, "I believe that maintaining the philosophy of managing good funds allows the majority of clients to make money."

He continued, "As a result of managing based on this philosophy, we have been able to achieve performance that outperforms benchmark indices and major domestic market indices while maintaining lower volatility compared to similar types over the long term," explaining, "This was thanks to investing mainly in stocks that demonstrate potential as time passes."

The six products of Korea Investment Trust Management are performance-dividend type products, and past performance does not guarantee future results. Additionally, these products are not protected by the Deposit Insurance Corporation under the Depositor Protection Act, and principal loss may occur depending on management results.

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