Kiwoom Asset Management Launches Kiwoom The Dream Mid-Short Term Credit Fund

Kiwoom Asset Management launched the "Kiwoom The Dream Mid-Short Term Credit Securities Investment Trust [Bond]" on October 27.

Following last month's Federal Open Market Committee (FOMC) meeting, expectations for an interest rate cut have grown, and credit spreads have entered an attractive range compared to historical averages, drawing attention to mid-short term bond strategies. In response to these market conditions, Kiwoom Asset Management has introduced the new Kiwoom The Dream Mid-Short Term Credit Fund, which is structured as a mid-short term credit portfolio.

The mid-short term bond market is characterized by high liquidity and a wide variety of issues, providing strong market depth. Compared to long-term bonds, losses during periods of interest rate hikes are limited by interest income, while during periods of rate stagnation or cuts, both capital gains and interest income contribute to returns.

The fund aims to deliver relatively higher returns than short-term bonds while reducing volatility by employing strategies actually used by institutional investors in the mid-short term segment. High-credit-quality bonds are allocated to relatively longer maturities, while high-yield issues are placed in short and ultra-short maturities, diversifying sources of return according to interest rate fluctuations and enhancing portfolio stability.

The fund targets a duration of approximately 1.5 years and primarily invests in domestic, high-quality mid-short term credit bonds with maturities of three years or less. The portfolio focuses on issues with attractive yield-to-maturity (YTM), including electronic short-term bonds, commercial papers, and corporate bonds. The "KIS-Kiwoom Mid-Short Term Composite Bond Index (A or higher)" serves as the benchmark, and the allocation to repo and short-term credit instruments is flexibly adjusted according to market conditions to minimize interest rate volatility risk.

A representative from Kiwoom Asset Management explained, "A key advantage is that investors can participate in a portfolio priced at institutional trading levels, rather than the retail bond prices typically encountered in the small-lot bond market, and can invest in a flexible deposit and withdrawal format."

He added, "Based on the management expertise of the 'Kiwoom The Dream Short-Term Bond Fund,' a flagship product with 3 trillion won in assets, this new fund will be suitable for investors seeking stable returns even amid changing interest rate environments."

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