KCGI Asset Management said on Feb. 2 that it launched the "KCGI Fidelity U.S. AI Tech target-conversion [bond mixed]" fund and began subscriptions.
This product is a mixed bond fund composed of less than 50% overseas stocks and at least 50% bonds. If it achieves a target return of 7%, it is converted into a bond fund that invests in domestic bonds. To hedge against potential exchange-rate fluctuations arising from investing in overseas stocks, it plans to apply a certain level of currency hedging to dollar assets.
In addition, it primarily invests in U.S. artificial intelligence (AI) tech stocks identified using Fidelity's global research capability. This is the first product launched since the two companies' strategic partnership in Jan.
Fidelity is a global asset manager that manages $1.086 trillion (about 1,550 trillion won, as of the end of Dec. last year). KCGI explained that it is known for conducting bottom-up research that prioritizes fundamental analysis—such as meetings with corporate management and supply-chain analysis—by operating its global network to select investment targets.
The fund will provide a "model portfolio" composed of 20 to 40 elite names, selected from about 50 high-conviction stocks within Fidelity's curated universe of U.S. technology stocks. KCGI Asset Management will further screen the investment list by excluding corporations with low market capitalization or limited liquidity and trading volume among the stocks in the model portfolio.
Another differentiator of the fund is that it automatically converts to a bond fund once the 7% target return is reached. It suits conservative investors who want to lock in revenue and investors seeking mid-risk, mid-return. The strategy is said to be suitable for reducing the psychological biases that can occur when investors directly invest in an index or an exchange-traded fund (ETF).
The subscription period for this fund runs from today through the 13th of this month. It is available through Woori Bank, Shinhan Bank, Busan Bank, NH Securities, Meritz Securities, Mirae Asset Securities, Samsung Securities, Shinhan Securities, Hana Securities, Hyundai Motor Securities, and KCGI Asset Management. The inception date is on the 13th.
Meanwhile, KCGI Asset Management is holding commemorative events through the 28th of this month to mark the fund launch, including "Find your AI style," which offers prizes by lottery to those who assess their AI usage style and share the results on social media.
Kang Young-su, head of global investments at KCGI Asset Management, said, "As investing in AI corporations grows, the importance of research is increasing, and we expect that an approach based on Fidelity's global research to select stocks will deliver better investment outcomes."