KCGI Asset Management said on the 22nd that its first equity target conversion fund, the "KCGI Korea Small-cap Target Conversion Fund," succeeded in raising 43.2 billion won, surpassing its target.
This fund is a target conversion fund that automatically converts to a bond type when it achieves a target return of 12%. It plans to operate a portfolio composed of stocks with strong growth and liquidity among mid- and small-cap stocks, excluding the top 100 KOSPI stocks by market capitalization.
More than 60% of the portfolio will be composed of stocks, and it will invest by selecting 30 mid- and small-cap stocks with high growth potential. Considering small-cap characteristics, it will also manage risk by composing a basket of stocks that meet certain liquidity criteria.
Kim Hyeong-seok, head of equity management at KCGI, who manages the fund, said, "As the possibility of a rate cut has increased at the recent FOMC, the investment environment has improved," and added, "Undervalued small-cap stocks are expected to show better share-price trends than large caps."
KCGI Asset Management explained, "Expectations for the domestic stock market have risen due to the recent trend of interest rate cuts and the push for amendments to the Commercial Act to strengthen shareholder returns," and added, "As the target conversion feature, which automatically switches to a bond type when the target return is reached, came to the fore, securities firm clients showed strong interest."