KCGI Asset Management said on the 23rd that it will begin recruiting for "KCGI Target-Conversion No. 6" through the 27th.
The fund is designed to invest at least 50% in bonds and up to 30% in stocks, and to convert to a bond type once it achieves a target return of 6%.
An official at KCGI Asset Management explained the background for setting up No. 6, saying, "Recently, as volatility in the stock market has intensified, there have been many requests from investors for target-conversion setups because it is difficult to judge when to buy and sell."
KCGI Asset Management launched its first target-conversion fund in April last year and has since attracted about 600 billion won to target-conversion funds.
In the stock segment, the fund seeks excess returns through flexible adjustments between growth and value stocks. It also plans to employ a strategy to minimize portfolio risk by managing sector and stock weightings.
In the bond segment, it plans to buffer volatility by investing more than 50% in high-quality bonds such as Government Bonds, monetary stabilization bonds, and high-grade financial and corporate bonds (bond rating AA- or higher, short-term bonds, CP A1 or higher).
The investment grade is operated as Grade 4 (moderate risk), and after achieving a target return of 6%, it converts to a bond type that sells all stock-type assets and invests only in bond-related assets. The investment grade also changes to Grade 5 (low risk).
An official at KCGI Asset Management said, "In the stock segment, we aim to achieve the target return early by incorporating the management strategy of the KCGI Korea Fund."
The fund can be subscribed to only during the offering period and is a unit-type fund that cannot be purchased after the offering period, and even if redeemed in the middle, no redemption fee is charged. The sales fee is within a 1.0% front-end load for Class A, and the total fee is 0.443%.
Subscriptions are available at distributors such as Hana Bank, Busan Bank, Kyobo Securities, Meritz Securities, Samsung Securities, Shinhan Securities, Yuanta Securities Korea, Eugene Investment & Securities, Hanyang Securities, iM Securities, KB Securities, NH Securities, SK Securities, and KCGI Asset Management, and for detailed schedules, contact each distributor.