Korea Investment Trust Management noted on the 17th that it launched the 'Korea Investment U.S. S&P 500 Equal Weight More Dream' fund at SC First Bank. The fund was released as a currency-hedged (H) fund to hedge against risks from exchange rate fluctuations.
The Korea Investment U.S. S&P 500 Equal Weight More Dream Fund is an index fund that tracks the Standard & Poor's (S&P) 500 Equal Weight Index, which represents the U.S. stock market. The S&P 500 Equal Weight Index invests in equal proportions across the 500 stocks that make up the S&P 500, allowing for investment in a group of strong corporations representing the U.S. stock market while mitigating the high concentration risk associated with a few stocks.
Investing in the S&P 500 Index using an equal weight approach diversifies major investment sectors, including industrial goods, finance, healthcare, and information technology (IT). In contrast, investing using a market capitalization-weighted approach leads to a stronger concentration on specific sectors with higher market caps, limiting investments primarily to IT.
Korea Investment Management explains that the equal weight approach is advantageous even in the current market environment. They noted, "If interest rates decrease, small and mid-cap stocks, which have had heavy interest burdens due to high rates, are expected to benefit, making it possible to anticipate relatively high revenue. "
The Korea Investment U.S. S&P 500 Equal Weight More Dream Fund also has the strength of fast redemption payments. Following its name 'More Dream,' the fund applies a reference price after 3 business days for redemption requests made before 5 p.m. This is similar to the trading settlement cycle for stocks and exchange-traded funds (ETFs). Compared to existing public offering funds, which take more than 9 business days to process redemption payments, this represents a reduction of more than half.
Kim Hyun-tae, head of the global quant management division at Korea Investment Trust Management, explained, "While considering the possibility of interest rate cuts, investments can also be made in sectors expected to benefit from a potential Trump administration, such as industrial goods, energy, and utilities."
Meanwhile, the Korea Investment U.S. S&P 500 Equal Weight More Dream Fund is a performance-dividend product, meaning that past revenue does not guarantee future performance, and there is a risk of principal loss depending on management results.