KCGI Korea Target Conversion Bond Mixed Fund Gains Popularity, Raises 56 Billion KRW

Amid heightened volatility in the capital markets, the stability and profitability of the KCGI Target Conversion Bond Mixed Fund are drawing attention.

On April 21, KCGI Asset Management announced that the total amount raised for the KCGI Target Conversion Bond Mixed Fund, which was offered from April 7 to April 18, reached 56 billion KRW, surpassing initial expectations.

This is the largest amount raised in a unit offering since KCGI became the largest shareholder in August 2023. The strategy of securing both stability and profitability in a highly volatile market has proven effective. The fund's product and channel marketing capabilities, brand recognition, and improved management performance have been recognized by the market, leading to these results.

A KCGI Asset Management representative stated, "Due to strong additional demand from high-net-worth individuals and corporate clients, we plan to launch a second fund."

The representative added, "By closely communicating with distributors and identifying customer needs, we were able to launch a product that achieved strong results." The representative also explained, "In a situation of heightened volatility caused by U.S. President Donald Trump's tariff war, the fund primarily manages high-quality bonds to pursue stability." The representative further noted, "The strategy of targeting a 6% return by utilizing the equity investment strategy of the Korea Fund for a portion of the assets has received positive feedback from clients."

The strong performance of the KCGI Korea Fund, KCGI's flagship long-term fund, has provided significant support. Last year, the KCGI Korea Fund outperformed its benchmark, the composite stock price index, by 23 percentage points and has exceeded its benchmark for seven consecutive years.

As of the end of last month, its one-year return stood at 11%, surpassing the benchmark by 19 percentage points and ranking among the top performers. A KCGI Asset Management representative explained, "We pursue flexible investments unconstrained by specific strategies and employ a barbell portfolio strategy that invests simultaneously in growth and value stocks at appropriate price levels, enabling us to achieve excess returns relative to the market."

The KCGI Target Conversion Bond Mixed Fund seeks both stability and excess returns by investing more than 50% of its assets in high-credit bonds, such as government bonds, monetary stabilization bonds, high-quality financial bonds, and corporate bonds (with a bond rating of AA- or higher, commercial paper and short-term notes rated A1 or higher), while investing up to 30% in domestic equities.

Once the target return of 6% is achieved, the fund converts to a bond-type fund. The maturity is three years, and if the target return is reached before maturity, the fund converts to a bond-type fund and is liquidated six months later. Investors can redeem their shares at any time without a redemption fee, making fund management convenient. A similar strategy, the KCGI Korea Bond Mixed Fund, recorded a one-year return of 9.7% last year, outperforming its benchmark by 6.5 percentage points.

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