KCGI Asset Management Announces Launch of First Target Conversion Fund for Small Caps
(Seoul = Yonhap News) Reporter Kim Tae-kyun = KCGI Asset Management announced on the 8th that it will launch its first target conversion fund that invests in small-cap stocks.
The core of the target conversion fund is to switch to safe assets like bonds to minimize the risk of principal loss as soon as the predetermined target return is achieved through aggressive investment.
The ‘KCGI Korea Small Cap Target Conversion’ product plans to invest more than 60% in up to 30 small-cap stocks with high growth potential, aiming for a 12% target return.
Given the volatility of small-cap stocks, KCGI Management plans to limit the fundraising to approximately 30 billion won.
A company representative explained, “The small-cap market is a treasure trove of potential ‘home run companies’ distinct from the large-cap market,” adding, “Analysis shows that companies with a market cap between 800 billion and 1.8 trillion won have a more frequent occurrence of annual returns over 100% compared to other companies.”
The representative added, “Having operated small-cap funds since 2015 and conducted over 3,000 company visits over ten years, we have significant expertise in small-cap stocks, which will be an advantage in achieving the target return.”
The fund will be available for subscription from the 8th to the 19th of this month through Korea Investment & Securities, iM Securities, KB Securities, and KCGI Asset Management.
The investment grade is classified as level 2 (high risk) before the asset conversion and level 5 (low risk) after. The fee for A-class is a 1.0% front-end load fee, and the total fee is 1.195%, with no redemption fee for early withdrawal.