[Provided by Korea Investment Management]
[Provided by Korea Investment Management]

Korea Investment Management has launched a publicly offered fund-of-funds designed to capitalize on what it sees as a "level up" phase for the domestic stock market. The product invests in key industries — including AI, semiconductors and defense — as well as stocks poised to benefit from corporate value enhancement policies, while applying a loss-differential structure to reduce investors' downside exposure.

The asset manager announced Wednesday the launch of the Korea Investment Level Up Korea Fund (private equity fund-of-funds).

The fund targets core industries and policy-beneficiary stocks expected to drive a medium- to long-term rerating of the Korean equity market. It opened for subscription Monday and will remain on sale through July 22, available at Korea Investment & Securities and Shinhan Bank private wealth management (PWM) centers.

The fund was launched on the premise that the Korean stock market has entered a new phase of advancement. It focuses on stocks central to domestic market growth, where semiconductor-driven earnings momentum intersects with the government's corporate value enhancement policies.

The fund's investment themes are organized around two pillars: "Korea's core industries" and "capital market policy beneficiaries." The core industries cluster covers the AI value chain, AI semiconductors, physical AI (robots and mobility) and security (defense and shipbuilding).

The capital market policy beneficiary segment — targeting stocks positioned to benefit from qualitative growth — includes Samsung Group shares, stocks with low price-to-book ratios that could see improvement through amendments to the Commercial Act (known as K-corporate value stocks), and high-quality Kosdaq names.

As a fund-of-funds, the Korea Investment Level Up Korea Fund allocates equally (approximately 14% each) across seven underlying private equity funds. Each underlying fund uses a loss-differential structure in which senior (Class 1) capital comes from retail investors in the public fund, while subordinated (Class 2) capital is provided by affiliates of Korea Investment Holdings.

Should any underlying fund incur losses, junior-tranche investors absorb those losses first, up to 15% of each fund's net assets.

On the upside, profits are shared proportionally between senior and junior investors up to a 10% fund return. Beyond that threshold, gains are distributed 55% to senior investors and 45% to junior investors.

Jang Ju-young, lead portfolio manager and head of equity management division 1 at Korea Investment Management, said the Korean stock market is currently showing high volatility but is expected to sustain its earnings rally driven by surging global demand for AI hardware. "Combined with policy momentum for governance reform, the market is facing an unprecedented growth opportunity," he said.

He added that the Korea Investment Level Up Korea Fund "seeks to minimize investor losses through its loss-differential structure while capturing the performance of key market leaders during a domestic equity bull market."

Korea Investment Management has been among the more active asset managers in rolling out new products recently. On June 23, it listed the ACE K Semiconductor TOP2+ ETF, which concentrates on the two leading domestic companies in the global AI semiconductor market, and the ACE Korea AI Power TOP10 ETF, which invests in domestic companies expected to benefit from surging power demand and grid infrastructure buildout in the AI era.


th5@heraldcorp.com