KB Asset Management launches fund investing in 10 U.S. big tech firms, with a 7% target return

[Financial News] KB Asset Management is launching a fund that invests in major U.S. technology companies, including Nvidia and Apple, and converts to a bond-focused fund once it reaches its target return.
According to KB Asset Management on the 19th, the KB U.S. Big Tech TOP10 50 Target-Return Conversion Fund invests in 10 U.S. big tech companies leading the artificial intelligence (AI) industry. It seeks returns through equity investments, then reallocates assets toward bonds once a certain return level is reached.
The investment targets are 10 companies: the existing Magnificent Seven (M7), plus Broadcom, AMD and Palantir. The fund invests across related industries, from AI semiconductors to cloud infrastructure and software.
Rather than varying allocations according to market capitalization, the equity portfolio allocates around 10% to each of the 10 stocks. It rebalances the stocks’ weights regularly each month, partially selling those whose share prices have risen relatively more and buying more of those whose portfolio weights have declined. The target return is 7% for Class A.
Once the cumulative investment return reaches the target, the fund sells all equity-related assets and shifts its strategy to focus on domestic short-term bonds. It then invests in short-term bond exchange-traded funds (ETFs) and money market funds (MMFs), among other assets, focusing on reducing interest-rate risk and generating interest income.
The fund is available through KB Kookmin Bank and Mirae Asset Securities, among others. It will accept investors through the 29th and is scheduled to be set up on the 30th.
Beom Gwang-jin, head of the Pension Wealth Management Division at KB Asset Management, said, “The fund is designed to invest equally in key companies in the U.S. AI industry and to reduce volatility by switching to a bond-focused strategy after reaching its target return. It could be an alternative for investors who consider both the growth potential of big tech companies and the characteristics of target-return conversion funds.”

[email protected] Lee Jeong-hwa Reporter