English translation of the original Korean report. Images and source documents may contain Korean text.

5 billion won of its own capital was paid in last year; attention is drawn to the background of the fund size reduction and whether the existing investment has been recovered.

Hyundai Investment Asset Management, an affiliate of Hyundai Marine & Fire Insurance, decided to inject an additional maximum of 5 billion won into a fund where it invested 5 billion won of its own capital last year.

The total assets under management (AUM) of the fund were tallied to have decreased from 50 billion won in June this year to 13.9 billion won in November. Attention is drawn to the background behind the decision for additional investment, given that the fund’s size, which includes both investor funds and the asset manager’s own capital, has significantly decreased.

According to data from Fund Doctor by Hyundai Investment Asset Management and fund rating agency Zeroin on the 7th, the assets under management of ‘Hyundai Investment Index Alpha Securities Investment Trust No. 1’ decreased from 50 billion won on June 10 to 27.4 billion won on September 15, and to 13.9 billion won on November 6. This represents a reduction of approximately 36.1 billion won over about five months. However, since assets under management are affected not only by the inflow and outflow of investor funds but also by changes in the prices of held assets, the entire decrease cannot be attributed solely to redemptions or investment losses.

This fund also includes the asset manager’s own capital. Hyundai Investment Asset Management approved a 5 billion won investment on February 3 last year, and paid in 2.5 billion won each on March 4 and April 4. The purpose was to enhance accountability for fund management and accumulate operational performance. At the time, the investment was to be maintained for at least one year, and those periods ended in March and April of this year, respectively.

■ Fund size decreased, yet additional investment made; what happened to the original 5 billion won?

The company approved a plan to invest an additional maximum of 5 billion won in the same fund on the 23rd of last month, and reflected this in the investment prospectus on the 5th of this month. The additional investment is also to be maintained for at least one year, and thereafter, it is to be recovered in principle over two or more installments.

The problem is whether the previously invested 5 billion won still remains in the fund, and whether some or all of it has been recovered cannot be confirmed solely from publicly available data.

The fund’s returns are also an aspect investors should examine. According to Fund Doctor, the year-to-date return for the Index Alpha Fund S-class as of November 6 was 39.56%, but it recorded -19.38% for the recent three months and -24.85% for the recent one month. However, these are the fund’s period-specific returns, which may differ from the actual investment performance of the 5 billion won invested by the asset manager last year.

The current balance and whether the 5 billion won paid in by Hyundai Investment Asset Management last year has been redeemed have not been confirmed. While the fund’s assets under management decreased from 50 billion won in June to 13.9 billion won in November, the company approved an additional investment of up to 5 billion won, but the actual payment status and amount have not been disclosed.