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KCGI Asset Management is rolling out a bond-mixed fund that combines domestic growth stocks with high-grade bonds to reduce exposure to equity market volatility. The strategy caps the equity allocation below 50 percent, concentrating that portion in high-growth names, while directing more than half of assets into investment-grade bonds to generate stable interest income.
The firm on Thursday launched the KCGI Korea Growth Leadership 50 Securities Investment Trust [Bond-Mixed], which invests less than 50 percent in domestic equities and at least 50 percent in bonds.
On the equity side, the fund selects both "traditional growth stocks" — companies with expanding sales and earnings — and "qualitative growth stocks," whose holdings of equity securities, cash and other assets are growing in value or being revalued. The fund employs an all-cap strategy, targeting large-cap and small- and mid-cap stocks alike, allowing the portfolio to adapt to changing market conditions.
The equity sleeve will hold a concentrated portfolio of 15 to 30 names. The fund uses quantitative indicators to screen investment candidates and applies a phased stop-loss framework to manage downside risk.
The bond sleeve is built around government and public bonds, bank bonds, credit-specialized financial company bonds, corporate bonds rated AA- or higher, and commercial paper rated A1 or above. The portfolio will focus on short- to medium-term maturities to manage interest rate sensitivity, with a target duration of approximately 1.1 years. The fund will also seek additional returns by analyzing duration positioning, yield-curve dynamics and relative value across bond sectors.
The equity portion will be managed by Kim Hyeong-seok, head of the equity management team, and the bond portion by Hong Sa-wook, head of the bond management division. Kim has 11 years of experience identifying growth stocks through direct company visits, while Hong brings more than 20 years of bond research and portfolio management experience.
KCGI Asset Management has been steadily expanding its fixed-income capabilities and product lineup. In June, it launched the KCGI Korea Aggregate Bond Fund, which invests in high-grade domestic medium- and long-term bonds. Earlier, in July last year, the firm elevated its bond management team to a full division and brought in Hong — formerly head of the bond management division at Mirae Asset Global Investments — as its chief, strengthening its fixed-income infrastructure. With this latest launch, the firm has broadened its investment options from short-, medium- and long-duration bond products to a bond-mixed fund that pairs growth equities with high-grade bonds.
The fund is structured as an open-ended, evergreen vehicle with no maturity date. It carries a risk rating of 4 (moderate risk), allows mid-term redemptions and charges no redemption fee.
"John Bogle, the father of index funds, once advised that a simple balanced portfolio of 50 percent stocks and 50 percent bonds is an excellent option for retail investors, rather than complex asset-allocation strategies," a KCGI Asset Management official said. "This fund should be a fitting choice for investors who want to actively defend against equity volatility while gaining exposure to the long-term growth potential of the Korean stock market."
hajun825@heraldcorp.com
