[Market Insight] Asset Plus: "AI Will Become a Pillar of Company Growth"

Domestic Equity Management Head, the Strong Player, "AI is Perfect for Interpreting Quantitative Value"
Park Juseong, CEO of Alphabridge, "The Greatest Advantage of AI is Its Lack of Emotion"

"In the future, artificial intelligence (AI) will become a pillar of Asset Plus Asset Management's growth."

Head of Domestic Equity Management at Asset Plus Asset Management, the stronger party (right), and Park Ju-seong, CEO of Alpha Bridge. Photo by Asset Plus Asset Management

Kang Ja-in, Head of Domestic Equity Management at Asset Plus (Director), stated in an interview with Asia Economy, "The more advanced AI algorithms become, the more they can perform quantitative tasks that humans cannot," and expressed confidence that "exchange-traded funds (ETFs), private equity funds, and algorithm-based AI funds will drive growth."

Asset Plus recently established an AI Asset Management Team, led by Director Kang. He is the eldest son of Kang Bang-cheon, the founder of Asset Plus Asset Management, and joined the company in 2014. He said, "Now, algorithmic funds that can analyze and interpret large volumes of data, that is, contain quantitative value, are also necessary," adding, "AI is perfectly suited to interpret quantitative value."

Support for Asset Plus's AI management technology is provided by its subsidiary, Alphabridge. Starting as an in-house venture in 2016, it was officially established in 2022. Park Ju-seong, CEO of Alphabridge, who participated in the interview, explained, "The biggest advantage of AI is that it has no emotions, so it can be consistent at all times," and added, "It can analyze vast amounts of data that are difficult for humans to handle and find hidden value." He further elaborated, "Anyone can become a fund planner."

Alphabridge currently provides AI investment services to four securities firms, including NH Investment & Securities, but plans to expand its client base to product sectors in the future. CEO Park said, "We can provide AI solutions to companies lacking infrastructure to create products or offer various services," and emphasized, "Although we are a subsidiary of Asset Plus, the ownership, intellectual property (IP), and know-how related to the products belong entirely to the contracting parties, so there is no need to worry about strategic exposure."

Asset Plus and Alphabridge are currently planning to launch two types of AI public funds. CEO Park stated, "The AI fund will selectively operate only relatively more valuable companies within the S&P 500."

Head of Domestic Equity Management at the leading Asset Plus. Photo by Asset Plus Asset Management

High Management Fees Reflect Confidence in Performance: "Pursuing ETFs Focused on Global No. 1"

Asset Plus charges higher management fees compared to other asset managers. For example, the management fee for the Asset Plus Global No. 1 Enterprise Focus 10 Active ETF is 0.99%, which is higher than the typical fees below 0.5% charged by other firms.

Director Kang emphasized, "The relatively higher management fees reflect confidence in long-term performance and a promise to achieve it," adding, "It is a natural policy for Asset Plus, which competes on the quality of performance rather than the volume of assets under management with a small number of funds."

He highlighted, "Our thinking has been proven by the long-term performance of the Global Rich Together Fund, which has been managed for 16 years," and noted, "Since its inception, it has ranked in the top 1% among comparable funds, showing a 455% return and outperforming the benchmark by 315 percentage points." He added, "I am confident that the slight difference in management fees will be more than offset by the difference in long-term performance."

The characteristic of Asset Plus's ETFs is their focus on global No. 1 companies. He explained, "Leading companies have more to gain in growing industries than anyone else," and added, "Even in declining industries, No. 1 companies have the ability to take market share from second and third place, which is why we focus on leading companies."

Director Kang plans not to follow the recent flood of ETFs. He emphasized that ETFs embodying the company's philosophy and principles are more important than simply increasing the number of products. He said, "We avoid launching theme-based ETFs," and added, "We focus on equity active ETFs that include companies with excellent business models or strong No. 1 companies in regions such as global markets, China, and the Association of Southeast Asian Nations (ASEAN)."

Juseong Park, CEO of Alphabridge. Photo by Asset Plus Asset Management

More Opportunities in Stocks than Bonds in the Second Half... "Will Pursue Value Investing"

Director Kang expects more opportunities in stocks than bonds in the second half of this year. He emphasized, "Everyone knows about the interest rate cut cycle," and added, "Lower interest rates mean increased interest in risk assets, so stocks are bound to improve."

He explained, "The KOSPI's annual operating profit last year was 169 trillion won, and the estimate for this year is 252 trillion won," adding, "The price-to-earnings ratio (PER) is still at a low level, making it an attractive situation."

Asset Plus plans to continue communicating with clients while adhering to its investment philosophy of △ investing in No. 1 companies △ investing in companies that can adapt to future environments △ and making long-term investments in good companies.

Director Kang emphasized, "Asset Plus will have two main pillars: the Rich Together Fund, which pursues qualitative value where human fund managers excel, and the AI Fund, which pursues quantitative value where AI is strong," and added, "We plan to continue pursuing the path of value investing."