Korea Investment K Policy-Beneficiary Target Conversion Fund Launched

Korea Investment Management announced on November 18 that it will launch the 'Korea Investment Together K Policy-Beneficiary Installment Purchase Target Conversion' fund, which invests in domestic equity ETFs themed around sectors expected to benefit from government policies through a split purchase strategy.

Subscriptions will be available through KakaoBank until November 27. The Korea Investment K Policy-Beneficiary Target Conversion Fund is designed to invest in sector-themed ETFs that are expected to benefit from the government's growth-oriented policies and capital market reform initiatives.

The fund employs a split purchase strategy to pursue a target return of 6% with relatively low volatility. At the initial stage, approximately 30% of the fund's net assets are invested in domestic equity ETFs tracking the KOSPI benchmark index. The remaining assets are allocated to domestic bond ETFs and cash equivalents, aiming to achieve both capital gains and stability. Subsequently, the proportion of equity ETFs is gradually increased based on predetermined rules.

Both price-based and time-based installment purchases are implemented simultaneously. Under the price-based strategy, if the benchmark index rises or falls by about 2%, the fund purchases domestic equity ETFs focused on government policy beneficiary themes, investing about 3% of its net assets. Purchases are limited to three times within the same index price range. The time-based strategy requires at least one 3% purchase every 10 business days, with a maximum of three purchases within any five-business-day period.

This product is a 'target conversion' fund, meaning that when the target return of 6% is achieved, all domestic equity-related ETFs are sold, and the fund is converted to a 'bond-fund of funds' structure. At least 60% of the assets are invested in relatively stable domestic short-term bonds and monetary stabilization bonds (Monetary Stabilization Bonds), securing returns until liquidation and maintaining a low-risk portfolio.

The fund's management period varies depending on when the target return is achieved. The period is divided as follows: one year from the initial setup date (if achieved within six months), six months after the fund's conversion (if achieved after six months), or three years (if the target return is not achieved). Investors can redeem their shares at any time without incurring redemption fees, regardless of the management period.

Kim Donghyun, Head of Global Quantitative Management at Korea Investment Management and the responsible portfolio manager, stated, "Expectations for a rise in the domestic stock market are increasing due to government financial policies and changes in the external political and economic environment. In fact, global stock markets recovered around the time of the US-China mutual tariff suspension in the first half of the year, and since then, the rebound in the Korean stock market has outpaced that of major countries."

He added, "The Korea Investment K Policy-Beneficiary Target Conversion Fund seeks to achieve its target return through systematic split trading, and upon reaching the target, it automatically rebalances and realizes profits, thereby reducing the burden on investors."

The Korea Investment K Policy-Beneficiary Target Conversion Fund is a performance-based product, and past performance does not guarantee future results. Investors should be aware that principal losses may occur depending on the fund's performance.

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