The Korea Teachers’ Credit Union (KTCU) will expand its alternative and overseas investments to diversify investment risks and build profitability amid low interest-rates environment and rising business uncertainties impacted by the coronavirus outbreak.
“Logistics centers and telecommunication infrastructure are among the most promising alternative investment sectors with the demand for logistics facilities is increasing as companies are looking for more storage after the pandemic,” chief investment officer Hohyun Kim said in an interview with the Maeil Business News on Thursday (July 23). “KTCU, which has paid attention to the logistics sector for a long time, is investing actively in blind-pool funds with expertise in that area.”
KTCU is also focusing on investments in distressed debt and credit situations, Kim said, adding that it has agreed to invest a total of 350 billion won ($291 million) with five managers since last year, seeing good investment opportunities for distressed assets.
Alternative investments accounted for 44.9% of KTCU’s portfolio in 2019, compared with 38.3% in 2017.
“KTCU has preemptively expanded the portion of investment in non-face-to-face and bio-related stocks that are expected to benefit in the virus era and succeeded in exceeding market returns,” Kim said. “In case of bond investments, we will continue to focus on maintaining the stability and safety of our portfolio.”
Stocks and bonds acounted for 16.5% and 21.7% of its portfolio at the end of 2019. KTCU manages more than 41 trillion won, the largest of any mutual fund.
“Although concerns over a slowdown in the economy continue due to the influence of coronavirus, investor sentiment is improving,” Kim added. “From the second half of the year, we believe that we aim to increase investments in safe assets that can yield high returns,.” (Reporting by Hyewon Chang)