President's fund pick draws investor attention

President Moon Jae-in visits the headquarters of NH NongHyup Bank in central Seoul in August 2019 to sign up for purchasing the NH-Amundi Victory Korea Fund. / Korea Times file

President Moon invests money in funds focusing on New Deal businesses

By Anna J. Park

After Cheong Wa Dae announced Wednesday that President Moon would invest in three mutual funds and two ETFs (exchange-traded funds) Friday, local investors showed interest in the President financial choices in and what specific stocks the mutual funds held.

According to Cheong Wa Dae spokesman Kang Min-seok, the President plans to invest 50 million won ($45,000) in the Samsung New Deal Korea Fund, KB Korea New Deal Fund, Shinhan BNPP Beautiful SRI Green New Deal Securities Feeder Investment Trust, Mirae Asset's TIGER BBIG K-New Deal ETF, and NH Amundi's HANARO Fn K-New Deal Digital Plus ETF to support the government's 160-trillion won Korean New Deal growth initiative.

Since the Moon administration announced last summer that the government would invest around 160 trillion won by 2025 in the digital, green and renewable sectors as future growth engines for the economy, local asset management firms created various mutual funds and ETF products that focus on investing in companies expected to grow with the New Deal initiatives.

This is not the first time for the President to put his own money in financial investment products that support his policy directions.

In August 2019, President Moon invested 50 million won ($45,000) in asset manager NH-Amundi's Victory Korea Equity Fund as the mutual funds' portfolio is composed of dozens of quality Korean companies ― from small- and medium-sized enterprises to large conglomerates ― engaged in the materials, parts and equipment sectors. This followed Japan placing restrictions on exports of certain key industrial materials to Korean firms. Moon's investment was showing support for local materials and equipment companies to induce further growth in this sector.

The President has also gained a handsome return of 90 percent from the fund investment over the past 16 months.

The NH-Amundi Victory Korea equity fund logged 97.8 percent during the past 17 months since the fund's inception, a much higher rate of return compared to the KOSPI's 56.2 percent during the same period.

According to Cheong Wa Dae, President Moon will leave the original principal of 50 million won in the fund, while the profit will be invested in the three funds and two ETFs.

"President Moon said in his New Year address that his New Deal policy will change the people's quality of life; through the investment, the President hopes to deliver a message that the achievement made possible through the cooperation of large conglomerates and small- and medium-sized companies will be reinvested into the nation's future," Kang said.

Retail investors follow to purchase President's funds

As individual investors are trying to find a good investment amid the current low interest rate, while ensuring stability as well as profitability, some think it is natural to follow the President's lead.

In the case of the NH-Amundi Victory Korea equity fund, its initial assets under management of 30 billion won grew quickly once the President invested ― now they stand at 323.5 billion won.

Market watchers expect the five products chosen by the President will see similar growth soon. Their names are already being shared widely on retail investors' SNS postings, being described as must-buy financial products. The top 10 stocks owned by the mutual funds and ETFs were also shared among stock investors once the news of the President's investments was made public late Wednesday afternoon.

The Samsung New Deal Korea Fund invests in local sectors with growth potential, ranging from digital platforms and renewable energy to waste management ― companies include Naver, Hansol Chemical, TY Holdings, and Korea Carbon.

The KB Korea New Deal Fund mostly invests in eco-friendly companies or secondary battery businesses, including Hanwha Solution, CS Wind, Hyundai Motor; while the Shinhan BNPP Beautiful SRI Green New Deal fund invests in sustainable growth companies such as Hyundai Mobis, LG Chem, Lotte Chemical and Hyundai Glovis.

Mirae Asset's TIGER BBIG K-New Deal ETF invests in game and battery companies including Pearl Abyss, NCSOFT, DOUZONE, LG Chem and Samsung SDI; and NH Amundi's HANARO Fn K-New Deal Digital Plus ETF invests in various fast-growing digital and innovative firms Kakao, Naver, Celltrion and Samsung Biologics.

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