KCGI Asset Management launched the 'KCGI Korea Dividend Growth Securities Investment Trust [Stock]' on the previous day, targeting Korean dividend growth stocks amid rising KOSPI volatility. The fund focuses on quality dividend growth stocks where dividends increase alongside earnings growth, rather than simply high-yield stocks. Despite KOSPI volatility, listed companies' combined net profit surged from 102 trillion won in 2023 to 202 trillion won last year, with shareholder returns growing 37% in 2024 and 39% in 2025, creating expectations for increased shareholder distributions.
KCGI Targets Dividend Re-rating Opportunity in Korean Market
The fund seeks profit opportunities from dividend yield normalization (re-rating) as the gap between Korean and global markets narrows. KCGI Asset Management stated the fund pursues a hybrid strategy that reduces volatility through dividend stocks while selecting growth stocks with sustained earnings growth, securing relative defensive strength in downturns while avoiding underperformance during market rebounds.
KOSPI Dividend Yield Lags Global Markets Despite Earnings Growth
KOSPI's dividend yield stood at 1.45% as of the end of last year, significantly below major markets including France's CAC40 at 3.25% and the UK's FTSE100 at 3.11%. According to KCGI Asset Management, KOSPI listed companies' combined net profit reached 202 trillion won last year, up from 102 trillion won in 2023. The 2025 estimate stands at 674 trillion won. Shareholder returns (dividends plus treasury stock purchases and cancellations) increased 37% in 2024 and 39% in 2025 during the same period.
Fund Applies Four-Criteria Stock Selection Framework
The fund selects holdings based on four main criteria: earnings, dividends, growth potential, and shareholder returns. Specific evaluation factors include financial soundness (ROE, operating cash flow, debt ratio), dividend sustainability (historical earnings and dividend trends), earnings growth potential (performance improvement aligned with industry growth), and superior governance (major shareholders and management favorable to shareholder interests) plus corporate value enhancement commitment (alignment with value-up policies and expanded shareholder returns).
Fund Structure and Availability Details
The fund is a mother-child type, equity type, additional open-end public fund that invests 60% or more of trust assets in domestic stocks. The benchmark is the KOSPI Dividend Growth 50 Index with a risk grade of 2. Investors can subscribe through KCGI Asset Management, Daishin Securities, and Meritz Securities.
FAQ
What is the investment strategy of KCGI's new dividend growth fund?
The fund invests in quality dividend growth stocks where dividends increase alongside earnings growth, rather than simply targeting high-yield stocks. It applies four criteria including financial soundness, dividend sustainability, earnings growth potential, and superior governance with corporate value enhancement commitment.
How does KOSPI's dividend yield compare to global markets?
KOSPI's dividend yield stood at 1.45% as of the end of last year, significantly lower than France's CAC40 at 3.25% and the UK's FTSE100 at 3.11%. The fund targets profit opportunities as this gap narrows through dividend yield normalization.
