Korea Investment Value Asset Management Launches 'Korea Rerating Fund' Investing in Undervalued Domestic Stocks

Korea Investment Value Asset Management, an affiliate of Korea Financial Group, announced on July 4 that it has launched the 'Korea Value Korea Rerating Fund,' which invests in undervalued domestic stocks.

This product is being introduced at a time when the KOSPI has recently surpassed the 3,000 mark and as government policies to enhance corporate value and shareholder returns are gaining momentum, leading to increased investor interest in the domestic stock market.

The fund aims to reduce downside risk by comprehensively considering both the stability of corporate earnings and valuation levels (stock price relative to corporate value), while investing in companies expected to achieve earnings growth from an undervalued position. It employs a strategy targeting the effects of corporate value rerating. 'Valuation rerating' refers to a phenomenon in which a company's valuation is recognized at a higher level than in the past due to changes in the forward market, business expansion, improvements in shareholder return policies, management disputes, or M&A activities, which alter the standards or perceptions used to assess the company.

The fund focuses on investing in approximately 30 to 50 or fewer domestic stocks, excluding factors unrelated to a company's fundamentals?such as supply and demand, charts, or news?from trading decisions, and instead concentrating on the direction of corporate earnings. It actively buys when stock prices fall for reasons unrelated to corporate value and realizes gains when prices reach appropriate levels. The fund is managed by Chief Manager Yoon Junghwan, who has overseen the 'Korea Value 10-Year Investment Children’s Fund' for over seven years. The latter fund has achieved a return of 146% over the past five years.

A representative from Korea Investment Value Asset Management explained, "With the global economic environment turning more favorable for the domestic stock market and the government and political circles moving to strengthen shareholder protection and shareholder return policies, we expect the domestic stock market to rise in the medium to long term." The fund is distributed by Korea Investment & Securities. Korea Investment Value Asset Management is also holding various events related to this product.