KB Asset Management is launching a target conversion fund that invests in artificial intelligence (AI) corporations in the United States and China.
The 'KB U.S.-China AI Tech Target Conversion (Bond Mixed) Fund,' set to launch on the 16th, aims for profitability through investment in the U.S.-China AI value chain while securing stability by investing in high-quality domestic bond assets.
The portfolio allocation is at 40% stocks and 60% bonds. It selectively invests in corporations with AI technology competitiveness and high growth potential among publicly listed corporations in the U.S. and China.
The target revenue rate is 7%. If the cumulative operational revenue based on Class A reaches the target, all stock-related assets will be sold, and it will transition into a bond fund primarily investing in domestic bond-related assets.
Until the target conversion, it will invest up to 40% in three AI themes: ▲AI semiconductors ▲AI infrastructure ▲physical AI implementation application industries, generating revenue. The U.S.-China allocation will be diversified around 50% each.
Major investment corporations include the U.S. companies NVIDIA, Broadcom, Microsoft, Tesla, Palantir, as well as the Chinese companies BYD, Xiaomi, Alibaba, and Tencent.
The remaining 60% will be invested in short-term bond exchange-traded funds (ETFs) and money market funds (MMFs) that invest in high-quality domestic bonds.
The fund can be subscribed to through KB Kookmin Bank, KB Securities, Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, Shinhan Investment Corp., Yuanta Securities Korea, Eugene Securities, Samsung Life Insurance, Hanwha Investment & Securities, among others. The subscription period is from May 16 to May 29, with the fund expected to be established on May 30.
Yuk Dong-hwi, head of the Pension WM division at KB Asset Management, noted, “This product seeks to achieve profitability by investing in AI innovation corporations leading the global AI industry in the U.S. and China while reducing volatility through domestic high-quality bond investments. It is suitable for pension investors seeking stable revenue since it transitions to a bond fund upon reaching the target revenue.”