KCGI Asset Management launches dividend-growth fund, draws W31.1b on first day

KCGI Asset Management has unveiled a public equity fund targeting companies that combine sustained earnings growth with expanding dividends.

The asset manager said Tuesday it launched the KCGI Korea Dividend Growth Securities Investment Trust, a public fund investing in high-quality domestic dividend-growth stocks. The fund drew 31.1 billion won ($20.7 million) on its first day of operation, Friday.

Unlike conventional high-dividend strategies that simply screen for high-yield stocks, the fund selectively invests in what KCGI calls "quality dividend-growth stocks" — companies whose earnings growth is sustained while their dividends expand in tandem. The strategy pursues both dividend income and capital gains at the same time, with a focus on securing stability and growth potential even in highly volatile markets.

KCGI Asset Management plans to screen holdings against four criteria: earnings, dividends, growth potential and shareholder returns. Stock selection will involve a comprehensive assessment of financial soundness, dividend sustainability, earnings growth and management's commitment to shareholder returns. The portfolio will center on companies expanding their dividend payout ratios alongside earnings growth, those with payout ratios of at least 40 percent, and those offering dividend yields above the market average.

The fund's launch reflects rising corporate earnings and stronger shareholder returns among domestic companies. According to KCGI Asset Management, the combined net profit of Kospi-listed companies grew from 102 trillion won in 2023 to 202 trillion won in 2025, and is estimated to reach around 674 trillion won this year. Total shareholder returns — combining dividends and share buybacks and cancellations — rose 37 percent in 2024 and 39 percent in 2025.

The firm also expects regulatory changes, including amendments to the Commercial Act and the government's corporate value-up policy, to create a favorable environment for dividend-growth stocks. More than 700 companies have filed value-up disclosures since the program launched in May 2024 through April this year, and the combined net assets of value-up ETFs reached 3.1 trillion won as of April.

KCGI Asset Management also cited the gap between domestic dividend levels and those of major markets as room for improvement. At the end of last year, the Kospi's dividend yield stood at 1.45 percent and its payout ratio at 26.8 percent, both below those of major markets including the United Kingdom, Japan, Taiwan and Hong Kong. The firm expects domestic dividend stocks to be revalued as companies continue to raise dividends and strengthen shareholder returns.

"In a volatile market, we will use dividend stocks to reduce volatility while selectively adding growth stocks with sustained earnings momentum — pursuing a hybrid strategy that provides relative downside protection in falling markets while ensuring we are not left behind when markets rebound," a KCGI Asset Management official said.

KCGI Asset Management is also strengthening its long-term investment lineup. Its KCGI Freedom TDF·TIF series has accumulated net assets of 1.01 trillion won, becoming the first independent asset manager to surpass the 1 trillion won mark in combined TDF and TIF net assets.

The fund is a public equity fund that invests at least 60 percent of its trust assets in domestic stocks. Its benchmark is the Kospi Dividend Growth 50 index, and it carries a risk rating of 2. There are no maturity restrictions or early redemption fees, and the fund is available through KCGI Asset Management, Daishin Securities and Meritz Securities.