KB Securities Selects 5 Promising Funds Amid Stock Market Decline Due to COVID-19

[Asia Economy Reporter Oh Ju-yeon] KB Securities announced on the 31st that it has selected five core funds that investors should pay attention to when the global crisis caused by the spread of the novel coronavirus infection (COVID-19) comes to an end.

The five selected core funds are 'KB Tong China 4th Industry Fund (Equity)', 'Fidelity Global Technology Fund (Equity - Fund of Funds)', 'KB Star US S&P Index Fund (Equity - Derivative)', 'Kyobo AXA Power Index Fund (Equity - Derivative)', and 'Korea Investment Samsung Group Stock 1 Fund (Equity)'.

KB Securities selected the five core funds based on the Research Center's Core View and presented the leading industries expected to drive the future global economy and the price merits due to excessive declines compared to fundamentals as investment points for the funds.

According to the Core View, which served as the basis, it was recommended to make staggered purchases looking six months ahead until the end of April, when the peak of COVID-19 spread is expected, and the one-year investment attractiveness of Korea, the US, and China was upgraded with increased weight due to the rise in expected returns from stock price declines.

Regarding the first investment point, 'leading industries,' KB Securities selected KB Tong China 4th Industry Fund and Fidelity Global Technology Fund, considering the forecast that the IT sector will have the most outstanding visibility of earnings growth compared to other sectors and that most leading stocks in the rebound phase after a sharp decline belonged to the leading sectors of the previous cycle.

Additionally, from the perspective of 'price merit,' KB Star US S&P Index Fund and Kyobo AXA Power Index Fund were selected due to the superior performance of index funds compared to active funds in the rebound phase after a sharp decline, and Korea Investment Samsung Group Stock 1 Fund was selected because the decline in the Korean stock market is more excessive than during the 2008 global financial crisis and valuations are at a lower level.

Shin Geung-ho, head of the IPS division, stated, "Although the global stock market is struggling with a downward trend due to the global spread of COVID-19 and the resulting economic concerns, the stock market has already priced in this fear, so it will gradually stabilize," adding, "We hope to help customers manage their assets by introducing core funds that are good to invest in during the crisis escape phase."

The five recommended core funds may incur principal losses depending on management results. Fund purchases are available through nationwide branches and MTS ‘M-able (Mable)’ and HTS ‘H-able (Hable)’. For detailed information, please refer to the website or contact branches and customer centers.