Korea Investment SSGA Global Low Volatility Fund Ranks First in One-Year Returns Among Low Volatility Funds

Korea Investment Management announced on April 24 that the Korea Investment SSGA Global Low Volatility Fund recorded the highest one-year return among low volatility (Low Volatility·Low Vol) funds, including exchange-traded funds.

The low volatility strategy refers to an investment approach that diversifies into stocks with low volatility to achieve stable long-term returns. Funds that utilize this strategy are called low volatility funds. According to FnGuide, there are 11 low volatility funds established in Korea. As of the previous day (April 23), the Korea Investment SSGA Global Low Volatility Fund posted a one-year return of 19.19% (currency exposure type, S-P class), ranking first among its peers. During the same period, the fund's currency-hedged type also showed strong performance, recording a return of 15.27% (S-P class).

The Korea Investment SSGA Global Low Volatility Fund was launched in 2017 with both currency-hedged (H) and currency-unhedged (UH) types. It is characterized by being managed under a delegated investment agreement with State Street Global Advisors (SSGA), a leading global asset management company. SSGA is one of the world's top three asset managers, with assets under management totaling $4.72 trillion as of the end of last year. Korea Investment Management has entrusted the fund to SSGA to enhance operational efficiency by utilizing SSGA's 24-hour trading system and other resources.

This fund constructs its portfolio with developed market stocks that have lower volatility compared to its benchmark index (MSCI World Index). As of the portfolio on April 15, the allocation to U.S. equities was the highest at 68.14%. Outside the United States, the portfolio includes Japan (4.87%), Switzerland (4.53%), France (2.81%), and Germany (2.73%).

The fund also utilizes a quantitative system to maintain stable performance. The overall portfolio risk is monitored through the quant system, aiming for competitive returns relative to low volatility over the long term. As a result, the fund's three-year returns reached 18.20% (H type, S-P class) and 32.48% (UH type, S-P class), while returns since inception stand at 55.11% (H type, S-P class) and 92.52% (UH type, S-P class).

This fund is currently available for subscription through Gwangju Bank, KB Kookmin Bank, Daishin Securities, Shinhan Investment Corp., Hana Securities, Korea Investment & Securities, KB Securities, and SK Securities, among others.

Hwang Wootaek, Head of Global Equity Management at Korea Investment Management, stated, "Low volatility funds that manage volatility tend to deliver relatively strong returns during economic downturns. Investing without losses in a declining market enhances the effect of compounding, which leads to differences in long-term cumulative returns."

He added, "In times like these, when market volatility is intensifying, the Korea Investment SSGA Global Low Volatility Fund can be a good alternative for investors."

The Korea Investment SSGA Global Low Volatility Fund is a performance-based product, and past returns do not guarantee future returns. In addition, principal loss may occur depending on investment results.

원본보기 아이콘

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.