Shinyoung Asset Management Launches REITs IPO Target Conversion Fund

Shinyoung Asset Management announced the launch of a new fund, the ‘Shinyoung REITs and IPO Target Conversion Real Estate Investment Trust (Fund of Funds).’

This is the first real estate-related product since receiving the comprehensive asset management license. Shinyoung Asset Management applies its value investment philosophy to REIT assets, constructing a high-dividend portfolio selected from undervalued listed REITs that hold high-quality physical assets.

By including promising IPOs, the fund aims to secure additional returns. As a target conversion fund, once the fund’s return reaches 10% through REIT and IPO management, the investment will be shifted to domestic bonds and bond-related ETFs to reduce volatility and manage until maturity.

Kim Daehwan, Executive Director of the Investment Strategy Division at Shinyoung Asset Management, stated, "Although it is difficult to predict, we believe that interest rates worldwide are at their peak. Therefore, considering the high probability of interest rates declining and the positive impact this would have on REIT profitability, the investment environment is favorable for REIT assets."

He continued, "Under the Real Estate Investment Company Act, there is an obligation to return at least 90% of distributable profits to investors, making dividends a very important expected return in REIT investments."

Director Kim added, "We believe that closely monitoring REIT dividend yields will have a significant impact on achieving the target return, and we plan to devote considerable effort to this area."

Beyond the high-dividend REIT strategy, the alpha of this product lies in IPOs. He emphasized, "IPOs themselves have been recognized for growth potential in the market, and historically, they have shown superior stock performance on average after listing." Director Kim also said, "Through exchanges with sector analysts related to the IPOs, we plan to focus more on growth potential rather than financial stability when evaluating value, and if we can assign high scores, we will participate in demand forecasting to contribute to improving fund returns."

The Shinyoung REITs and IPO product is suitable for investors targeting medium risk and medium returns. Through selective stock picking, it can secure stability based on rental income characteristics of REITs. This product will be available for subscription through Shinyoung Securities from the 8th to the 12th of next month, with plans to expand the number of distributors in the future.