KCGI The Women Fund Launches Efforts to Improve Returns by Expanding Investment Target Companies

KCGI The Women Fund, established as Korea's first mutual fund pursuing gender diversity and gender equality, has expanded the scope of its investment target companies and is actively working to improve returns.

On the 26th at 2 p.m., KCGI Asset Management announced at the 'KCGI The Women Fund New Beginning' event held at The Forum in IFC Yeouido, Seoul, that it will expand the scope of its investment target companies from those with a high proportion of female management on the producer side to companies where women's roles are expanding on the consumer side.

This expansion of investment targets is interpreted as a strategic move to catch two rabbits: social responsibility and improved returns. To strengthen social responsibility related to gender diversity and gender equality, the fund will shift from a passive approach of investing selectively in companies with excellent existing indicators to an active engagement approach that demands companies establish environments supporting gender diversity and gender equality.

Established in November 2018, KCGI The Women Fund was introduced as a company-type mutual fund where investors are shareholders, unlike typical funds that take the form of beneficiary certificates. It is Korea's first women’s fund operated with a board of directors composed of female personnel overseeing the management company. As of April 29, its net assets amount to approximately 21.8 billion KRW.

At the general meeting held that day, six supervisory directors were appointed: Professor Seong Hyoyong of the Department of Economics at Sungshin Women’s University, former Executive Director Hyun Jumi of Shinhan Investment Corp., Professor Lee Eunjeong of Hanyang University, Professor Lee Dongyeop of Kookmin University, Professor Choi Sujeong of Soongsil University, and Professor Yoo Jaein of Ajou University.

KCGI Asset Management explained, "As of 2022, the female economically active population was 12.54 million, and the economic participation rate was 54.6%, which increased by 16% and 8.5%, respectively, compared to 2013. Women have established themselves as the mainstream of economic activity, with their contribution to consumption decision-making reaching 70-80% of total consumption."

Due to the change in criteria, the investment universe has expanded. The fund has relatively increased its weighting in consumer goods companies that are growth companies within female-led industries with continuous sales and profit growth or turnaround, as well as in the medical sector, thereby improving overall fund returns. According to data compiled by Shinhan Fund Partners, since the rebalancing in December 2023, the fund has recorded an excess return of 14 percentage points compared to the benchmark index as of April 19 this year.

Myeong Jaeyeop, Chief Portfolio Manager of KCGI The Women Fund, stated, "We will actively introduce exemplary cases of gender equality using our research capabilities and bring about meaningful improvements in companies, such as our governance improvement cases." He added, "Through this, we will fulfill our social responsibility to promote women's participation in management activities while enhancing returns, creating a virtuous cycle of expanded investment → strengthened social responsibility."