KCGI Asset Management has unveiled a bond-mixed fund that invests in domestic growth stocks and high-quality bonds together. It caps the stock portion at under 50% and allocates more than half to bonds to reduce stock market volatility while securing stable interest income.
KCGI Asset Management said on the 13th it launched the "KCGI Korea Growth Leadership 50 Securities Investment Trust [Bond-Mixed]."
In the stock institutional sector, it invests not only in traditional growth stocks with steadily rising sales and profits but also in corporations expected to see gains or revaluation in asset value such as holdings of equity or cash. It plans to use an all-cap strategy that includes both large caps and small and mid caps without limiting to a specific market capitalization size.
The portfolio is concentrated into 15–30 names. It narrows targets using quantitative indicators and manages risk by applying step-by-step stop-loss thresholds.
It allocates more than 50% of total asset to bonds. It mainly includes government and government-guaranteed bonds, bank bonds, and bonds from specialized credit finance companies, as well as AA- or higher rated corporate bonds and A1 or higher high-quality commercial paper (CP). It is managed with a focus on short- to mid-term maturities, with a target duration of about 1.1 years. It also seeks additional returns by using interest rate moves, the yield curve, and relative value across bond sectors.
Stock management is led by Head of Team Kim Hyeong-seok, and bond management by Deputy Minister Hong Sa-uk, head of the bond management division. Kim has 11 years of experience in discovering stocks through on-site corporate visits and in growth-stock investing, while Hong has handled bond research and management for more than 20 years.
The fund is an open-ended, additional-subscription product with no maturity, and its risk rating is Level 4 (moderate risk). As an open-end product, it allows early redemptions with no separate redemption fee.
A KCGI Asset Management official said, "John Bogle, the founder of index funds, once advised that a simple balanced portfolio of '50% stocks + 50% bonds' can be an excellent alternative for individual investors instead of complex asset allocation strategies," adding, "While actively defending against stock volatility, it will be an appropriate choice to invest in the long-term growth of the Korean stock market."