Key Takeaways
• A new Korean fund eases into volatile Chinese tech only when conditions are right.
• Instead of investing all at once, it follows a measured system triggered by price or time.
• Once a 10% return is achieved, the fund locks in profits by shifting entirely into bonds.
• Simulations show it outperforms the Hang Seng Tech index in down markets with smaller losses.
A Cautious Bet on China’s AI Momentum
While most funds leap headfirst into Chinese tech and hope for the best, Korea Investment Trust Management offers a more deliberate approach.
The Korea Investment Hang Seng Tech Step-Up Partitioning Target Conversion Fund offers exposure to fast-growing tech giants, without the volatility hangover.
The fund doesn’t rely on market timing or investor instincts. It’s built on a step-based system that increases risk only when the data backs it.
“This fund was developed to reduce the investment burden of Hang Seng Tech for investors and allow them to reach their target revenue rate through a trading strategy proven by simulation.” — Cha Hye-min, Head of Global Quantitative Management, Korea Investment Trust Management
How the “Step-Up” Strategy Works
Rather than jumping in all at once, the fund starts conservatively and ramps up as conditions improve.
• Begins with 30% in the Hang Seng Tech ETF and 70% in domestic bond ETFs
• Adds to equity exposure only when price movements hit ±2%, or every 10 business days
• Caps trades within specific timeframes and price ranges to prevent overtrading
This balance of price and time partitioning ensures the strategy responds to market signals—but doesn’t overreact.
Built for a 10% Win, Then a Safe Exit
The endgame for this fund is clear: earn a 10% return, then lock in profits and shift entirely to low-risk bond assets.
• Hit 10% within 6 months? Fund ends after 1 year
• Hit it after 6 months? Ends 6 months after reaching the target
• No target met? Fund continues up to 5 years
And for flexibility? Investors can cash out at any time without penalties.
Why This Strategy Might Work
The fund’s simulations show it reduces volatility compared to the Hang Seng Tech Index. Here’s the difference:
• Hang Seng Tech index: average drawdown of -18%
• Step-Up Fund strategy: reduced drawdown to -13%
• Lower exposure during downturns = smaller losses, better control
That’s a real advantage when the market is as unpredictable as China’s tech sector often is.
The Timing Is No Coincidence
This launch comes as Chinese AI is on the rise and capital inflows are spiking.
• AI platforms like DeepSeek are expanding China’s tech potential
• Beijing is backing the sector with economic stimulus
• Korean retail investors have poured ₩1 trillion into Chinese stocks this month
This fund gives them a safer route to tap into that momentum, without having to time the market or take on full risk upfront.
This isn’t a fast-money product. It’s a smart structure for cautious optimists—investors who want to ride the AI boom but don’t want to get burned.
You get calculated exposure to China’s top tech names, with rules in place to cut losses and lock gains.
That’s not just smart investing. It’s investing with a safety net.
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