KB Asset Management Launches Korea's First 'India Benchmark Index Fund'

KB Asset Management announced on the 9th that it launched the country's first index fund investing in India's representative index, the ‘KB Star India Nifty50 Index Fund,’ on the 6th of this month. This fund tracks the ‘Nifty50 Index,’ which represents the Indian stock market.

While there have been three exchange-traded funds (ETFs) investing in the Nifty50 Index, this is the first index fund of its kind. It is expected to open new investment opportunities in India for investors who are not familiar with ETF trading.

India is a country with a vast domestic market backed by a population of 1.4 billion, possessing enormous potential. The ‘Modinomics’ policy, focusing on infrastructure investment, manufacturing promotion, and currency reform, acts as a driving force for economic and stock market growth.

According to the International Monetary Fund (IMF), India, which ranked 5th in global gross domestic product (GDP) last year, is expected to rise to the top 3 countries by 2027.

Investors interested in the highly promising Indian market should pay attention to the representative Indian index, the ‘Nifty50 Index.’ The ‘Nifty50 Index’ consists of the top 50 blue-chip stocks listed on the National Stock Exchange of India (NSE) with large market capitalization and high liquidity.

The index’s representative components include India’s largest and the world’s 4th largest private bank, ‘HDFC Bank’ (11.0%), leading petrochemical and distribution company ‘Reliance Industries’ (9.2%), cloud services leader ‘Infosys’ (6.1%), and India’s top tobacco manufacturer ‘ITC’ (4.1%).

As of the end of July this year, the sector weightings are Financials (33.2%), IT (15.1%), Energy (11.6%), Consumer Discretionary (9.2%), and Consumer Staples (7.3%) in that order.

Lee Seok-hee, Head of Pension WM Division at KB Asset Management, said, “By utilizing the ‘KB Star India Nifty50 Index Fund,’ investors can easily invest in India’s leading companies at a lower cost compared to active funds. It will be an efficient investment opportunity, especially for investors considering investing in the Indian market with pension assets.”

The ‘KB Star India Nifty50 Index Fund’ is divided into hedged (H) and unhedged (UH) types. It is available for subscription through Hanwha Investment & Securities, Kiwoom Securities, and Woori Investment & Securities, with plans to gradually expand the sales channels.