KB Asset Management Launches 'KB U.S. Big Tech TOP10 50 Target Conversion Fund'

KB Asset Management is launching a new target-date conversion fund that invests in 10 leading U.S. artificial intelligence (AI) and technology companies at equal weights, then converts to a bond fund once it reaches its target return.

On October 19, KB Asset Management announced the launch of the KB U.S. Big Tech TOP10 50 Target Conversion Fund. The fund will be offered through October 29 and is scheduled to be established the following day, October 30.

The portfolio consists of the “Magnificent 10 (M10),” adding Broadcom, AMD and Palantir to the existing “Magnificent 7 (M7)” companies. It will invest in key leaders across the value chain, from AI semiconductors to cloud infrastructure and AI software, and will consider adding promising new stocks when they are listed in the future.

Instead of using a market-capitalization-weighted approach, the equity portion will invest an equal weight of around 10% in each of the 10 stocks. This approach is designed to reduce concentration in any single stock and to adjust the weights regularly each month. The fund will manage its portfolio by selling some shares of stocks that have risen relatively more and buying more of those whose weights have declined.

The target return is 7% for Class A. When the cumulative investment return reaches 7% (a cumulative base price of KRW 1,070), the fund will sell all equity-related assets and convert to a bond fund focused on domestic short-term bonds. After the conversion, it will focus on short-duration bond exchange-traded funds (ETFs) and money market funds (MMFs) to reduce risks from interest-rate fluctuations and seek stable interest income.

“The KB U.S. Big Tech TOP10 50 Target Conversion Fund is designed to pursue growth opportunities by investing equally in key companies driving the AI industry, and to reduce return volatility by converting to a bond fund after reaching its target return,” said Beom Gwangjin, head of the Pension WM Division at KB Asset Management. “It will be a good option for investors who are considering both the growth potential of U.S. big tech companies and the features of target conversion funds.”

The fund is available through major distributors, including KB Kookmin Bank and Mirae Asset Securities.

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