Hantoo Asset Management Launches Korea Investment US S&P 500 Equal Weight More Dream Fund

Korea Investment Trust Management announced on the 17th that it has launched the ‘Korea Investment US S&P500 Equal Weight More Dream’ fund at SC First Bank. The fund was launched as a currency-hedged type (H) to hedge against risks arising from exchange rate fluctuations.

The Korea Investment US S&P500 Equal Weight More Dream fund is an index fund that tracks the S&P500 Equal Weight Index, a representative index of the US stock market. The S&P500 Equal Weight Index invests equally in the 500 stocks that make up the S&P500. It is an index that invests in a group of high-quality companies representing the US stock market while mitigating the high concentration risk in a few stocks.

When investing in the S&P500 index using the equal weight method, the main investment sectors are diversified into industrials, financials, healthcare, IT, and others. In contrast, investing using the market capitalization weighting method results in a strong concentration in specific sectors with high market capitalization, limiting the investment sectors mainly to information technology (IT).

The equal weight method is advantageous even in the current market environment. The global economy has entered a phase of interest rate cuts. When interest rates fall, small and mid-cap stocks, which previously bore high interest burdens due to high interest rates, are expected to benefit, potentially leading to relatively higher returns.

The Korea Investment US S&P500 Equal Weight More Dream fund also has the advantage of fast redemption payment. Following the ‘More Dream’ in its name, if a redemption request is made before 5 PM, the redemption price applied will be the day after tomorrow’s (T+2) price, three business days from today (T), and the redemption payment will be made on the same day (if requested after 5 PM, the price of four business days will apply, and payment will be made in four business days). This is similar to the settlement cycle of stock and exchange-traded funds (ETFs). Compared to existing public funds, which paid redemption proceeds after 9 business days (T+8) following the redemption request, this reduces the period by more than half.

Hyuntae Kim, head of the Global Quantitative Management Department at Korea Investment Trust Management, explained, “The Korea Investment US S&P500 Equal Weight More Dream fund is suitable for investing in small and mid-cap stocks with high growth potential among the high-quality stocks included in the S&P500 index,” adding, “It can also invest in industrials, energy, and utilities sectors, which are expected to benefit from the next Trump administration, while considering the interest rate cut period.”