KCGI Asset Management Attracts 43.2 Billion Won to Small Cap Target Conversion Fund

KCGI Asset Management announced on September 22 that 43.2 billion won had flowed into its equity-type target conversion fund, the "KCGI Korea Small Cap Target Conversion Fund."

Funds were raised from September 8 to September 19. The fund is structured to convert to a bond-type fund once it achieves its target return of 12%. The portfolio is managed as a concentrated selection of listed companies with high growth potential and strong liquidity, chosen from among small and mid-cap stocks that are not included in the top 100 stocks by market capitalization on the Korea Exchange.

A representative from KCGI Asset Management explained, "Expectations for the domestic stock market have risen recently due to the trend of interest rate cuts and the advancement of amendments to the Commercial Act that strengthen shareholder returns. The advantage of the target conversion structure, which automatically shifts to a bond-type fund upon reaching the target return, has attracted significant interest from securities firm clients."

The fund will be managed by veteran fund manager Kim Hyungseok, head of the equity management team, who has accumulated expertise in small and mid-cap investments by visiting over 3,000 companies in the past 10 years since managing small-cap funds from 2015. Kim stated, "Small-cap growth stocks benefit from interest rate cuts," and added, "We expect undervalued small-cap stocks to show stronger price performance compared to large-cap stocks."

The fund invests more than 60% in equities and selects up to 30 small and mid-cap stocks with high growth potential within the value chain of growth industries to form a concentrated portfolio. Unlike typical small and mid-cap funds that focus on KOSDAQ stocks, this fund classifies approximately 2,500 stocks, excluding large-cap stocks, as small and mid-cap stocks to secure flexibility in portfolio composition.

Considering the characteristics of small caps, the portfolio is constructed with stocks that meet certain liquidity standards to manage risk. The fund's investment grade is set at Grade 2 (high risk) before the conversion date and is adjusted to Grade 5 (low risk) after the conversion date.

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