KB Asset Management said on Oct. 20 it will launch an additional target-maturity fund that invests in U.S. and China artificial intelligence (AI) tech corporations.
The KB U.S.-China AI Tech Target-Maturity Fund No. 3 unveiled that day seeks profitability through U.S.-China AI value chain investments while securing stability by investing in high-quality domestic bond assets. The portfolio allocation is around 50% stocks and 50% bonds.
The target return is 7%. When the cumulative management revenue for Class A reaches the target, it sells all stock-related assets and converts to a bond fund of funds, investing mainly in domestic bond-related assets.
The product follows the KB U.S.-China AI Tech Target-Maturity Funds No. 1 and No. 2. Both earlier products achieved their target returns ahead of schedule.
KB U.S.-China AI Tech Target-Maturity Fund No. 3 captures in a balanced way the growth of the AI industries in the world's two leading technology powers by simultaneously investing in the United States, which has strong AI-based technological competitiveness, and China, which has a fast-growing applied technology sector.
Key investee corporations include Alphabet, Tesla, Nvidia, Palantir, and Meta Platforms in the United States, as well as Xiaomi, Tencent, and Alibaba in China.
The remaining 50% is invested in short-term bond exchange-traded funds (ETFs) and money market funds (MMFs) that invest in high-quality domestic bonds, diversifying risk and seeking stable interest revenue.
Yuk Dong-hwi, head of the Retirement WM Division at KB Asset Management, said KB U.S.-China AI Tech Target-Maturity Fund No. 3 is an efficient product that seeks profitability by investing in U.S.-China AI innovation corporations while pursuing stability through investments in high-quality domestic bonds, adding that it is also suitable for retirement investors who want stable returns because it converts to a bond fund of funds when the target return is achieved.
The fund is available through Kookmin Bank, KB Securities, Shinhan Bank, NongHyup Bank, Busan Bank, Yuanta Securities Korea, Hana Securities, Korea Investment & Securities, iM Securities, NH Investment & Securities, Mirae Asset Securities, Hanwha Investment & Securities, and Samsung Life Insurance. Subscriptions will be accepted through Oct. 31, with immediate establishment on the same day.