KCGI Asset Management's U.S. artificial intelligence (AI) tech target return fund hit its target return in about three months after launch. With U.S. AI-related stocks rallying, the stock selection strategy that leveraged global manager Fidelity's research capabilities is being credited for the performance.
KCGI Asset Management said on the 8th that the "KCGI Fidelity U.S. AI Tech Target Return Fund" recorded a base price of 1,072.27 won as of on the 6th, surpassing its 7% target return. It came 82 days after its Feb. 13 launch. With the target return achieved, the fund will shift to a bond-heavy strategy going forward.
The product diversifies between U.S. AI tech corporations and domestic bonds. It applies a strategy that seeks both growth and stability by allocating less than 50% to U.S. AI-related stocks and 50% or more to domestic bonds. In particular, it features the use of research from global asset manager Fidelity to select corporations with high potential to benefit from the AI industry.
During the actual management period, the overseas stock institutional sector posted a 15.9% return, outpacing the Nasdaq's 12.3% and the S&P 500's 6.5% over the same period. The company said performance was helped by selecting corporations among AI-related names with strong potential for earnings improvement and growth.
A target return fund reduces exposure to risky assets such as stocks and shifts to bond-centered assets once it reaches a certain level of return. In rising markets, it aims to achieve the target return and then focuses on stable management thereafter.
Meanwhile, KCGI Asset Management has been accelerating the expansion of its AI-related product lineup. In Apr., it launched a new open-end product, the "KCGI Fidelity Korea-U.S. AI Tech [Equity]" fund. For this product, KCGI Asset Management directly manages domestic AI-related names, while the U.S. equity sleeve is run using a model portfolio built on Fidelity research.
Separately, KCGI Asset Management has been expanding its business around public equity funds since Chief Executive Kang Seong-bu acquired it in 2023. As of the day, assets under management (AUM) total about 6.1 trillion won.