KCGI Asset Management Launches 'KCGI Korea Dividend Growth Fund'

KCGI Asset Management announced on July 14 that it has launched the 'KCGI Korea Dividend Growth Equity Investment Trust [Equity]', which aims to simultaneously achieve stable dividend income and capital gains by selectively investing in high-quality domestic dividend growth stocks.

This fund is characterized by selectively investing in high-quality dividend growth stocks whose dividends increase in tandem with sustained profit growth, rather than simply including stocks with high dividend yields. KCGI Asset Management explained, "By using dividend stocks to reduce volatility during turbulent market conditions and selectively including growth stocks with ongoing profit expansion, we aim to secure relative defensiveness during downturns while remaining well-positioned for market rebounds, thus pursuing a hybrid strategy." The company added, "We also took into account the government's value-up policies, such as amendments to the Commercial Act, which are expected to increase corporate dividend payout ratios, when launching this product."

Reflecting strong market expectations for its differentiated management strategy, the fund attracted a large inflow of 31.1 billion won on its very first day of establishment, July 10, drawing keen attention from investors.

KCGI Asset Management presented four core criteria for stock inclusion: profit, dividend, growth potential, and shareholder returns. The company comprehensively evaluates financial soundness (ROE and operating cash flow), dividend sustainability, earnings growth, as well as the disposition of major shareholders and management toward shareholder interests and whether they align with value-up initiatives, considering overall corporate governance. Based on these factors, the portfolio focuses on: companies planning to expand payout ratios and steadily increasing dividends; companies with high mid- to long-term earnings visibility and payout ratios of at least 40%; and companies with dividend yields above the market average.

The background for the fund's launch lies in the rapid profit growth and expanding shareholder returns among domestic companies. The combined net profit of KOSPI-listed firms surged from 102 trillion won in 2023 to 202 trillion won in 2025, and this year's forecast is estimated to reach 674 trillion won. The scale of shareholder returns (dividends and share buybacks/cancellations) has also increased by more than 30% annually in recent years, creating an attractive investment environment.

The government's value-up policy is also fostering a favorable environment. Since the introduction of mandatory corporate value enhancement disclosure in May 2024, more than 700 companies have submitted official disclosures by April of this year, and the net asset value of related value-up ETFs has surged to 3.1 trillion won. In addition, tax benefits such as separate taxation of dividend income for high-dividend companies and corporate income tax credits have been added.

On the other hand, the dividend yield (1.45%) and payout ratio (26.8%) of the domestic stock market remain significantly lower than those of major countries such as France, the United Kingdom, and Japan. KCGI Asset Management believes that the process of narrowing the gap with global standards—namely, the normalization (re-rating) of Korea's undervalued dividend attractiveness—will create strong profit opportunities.

This fund is a mother-daughter, equity-type, open-ended public fund that invests at least 60% of its trust assets in domestic stocks, is operated without maturity, and does not charge a redemption fee for early withdrawal. Its benchmark is the KOSPI Dividend Growth 50 Index, and its risk rating is level 2. Subscriptions are available through KCGI Asset Management, Daishin Securities, and Meritz Securities.

This content was produced with the assistance of AI translation services.