KB Asset Management Launches 'KB Korea Advanced Strategic Industries Fund'

Industries to Be Fostered Through the National Growth Fund
Targeting the "12 Advanced Strategic Industries"

KB Asset Management said on October 21 that it had launched the KB Korea Advanced Strategic Industries Fund, which selects and invests in companies in the country’s advanced strategic industries with strong medium- to long-term growth potential.

Advanced strategic industries are sectors the government has pledged to foster and support over the next five years through the National Growth Fund. They comprise 12 sectors: semiconductors, displays, secondary batteries, biotechnology, robotics, defense, vaccines, hydrogen, future mobility, artificial intelligence (AI), critical minerals, and content.

As global big tech companies have recently increased AI-related investment, demand for memory semiconductors, power equipment, and electronic components has been rising. In the defense sector, expanding demand amid geopolitical uncertainty and an increase in orders are cited as drivers of growth. However, even companies in the same industry can have different growth prospects depending on their technological competitiveness, earnings, and profitability, making the ability to select individual companies important.

The KB Korea Advanced Strategic Industries Fund operates by reviewing about 500 stocks, creating a model portfolio of 70-90 stocks, and then selecting 30-50 stocks for the final portfolio. It assesses not only each industry’s growth potential but also technological competitiveness, order performance, and the ability to generate profits when selecting investments. Stocks whose prices rise solely on expectations of improved corporate governance or shareholder returns are excluded.

The fund will draw on KB Asset Management’s strong research capabilities to select stocks. Company visits by analysts and collaboration among sector managers and portfolio managers are intended to improve the quality of stock selection. In particular, the fund plans to seek excess returns by identifying small- and mid-cap materials, components, and equipment companies that receive relatively little coverage in brokerage research reports.

The portfolio will invest across multiple industries while focusing on individual companies with strong growth potential. It plans to seek investment opportunities in a range of fields, including semiconductors and power equipment, which are expected to benefit from increased AI-related investment, as well as defense, secondary batteries, biotechnology, robotics, and space.

Beom Gwangjin, head of the Pension WM Division at KB Asset Management, said, "Even within advanced strategic industries, companies can differ in their competitiveness and growth potential. We will draw on KB Asset Management’s research capabilities to identify promising companies and uncover medium- to long-term investment opportunities."

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