Korea Investment & Securities said on the 1st it will be the sole distributor of the profit-and-loss waterfall public fund "Korea Investment U.S.-Korea Next Innovation Growth Fund."
The fund selects and concentrates on Korean and U.S. stocks leading global innovation-driven growth. It is a public feeder fund of funds that invests indirectly in seven underlying private funds—U.S. artificial intelligence (AI) infrastructure, digital platforms, advanced manufacturing, future finance, Korea AI infrastructure, Korea new growth, and Korea policy beneficiaries—with Korea Investment Management serving as the manager.
It is a profit-and-loss waterfall fund that places customers in the senior tranche and affiliates, including Korea Investment Holdings, in the junior tranche; even if losses occur in each underlying fund, junior investors absorb losses first up to -15%.
Conversely, when an underlying fund posts gains, up to 10% of revenue is allocated between senior and junior investors at an 85:15 ratio, and for gains exceeding 10%, senior and junior investors split them 55:45.
The management period is three years. However, if the return reaches 15% before maturity, it is redeemed early. If the redemption condition is met within one year after initial setup, early redemption is available once the minimum one-year holding period has passed. If the condition is met after one year, redemption occurs after 15 business days from that point.
Yang Won-taek, head of investment products at Korea Investment & Securities, said, "With the stock market still optimistic about growth stocks, including the AI industry, we expect the profit-and-loss waterfall structure to enhance clients' investment stability."
Meanwhile, subscriptions for this product are open through Dec. 11. The setup date is Dec. 12.