T Rowe Price has launched the Target Income Global Bond Fund and the Target Income Global Allocation Fund in partnership with Korea Investment Management (KIM).
Both new funds will invest in the existing funds of T Rowe Price. The Target Income Global Bond Fund will invest in T Rowe Price’s Global Multi-Sector Bond Strategy and Global Investment Grade Corporate Bond Strategy.
The Target Income Global Allocation Fund invests in equities and bonds. The fund’s fixed income strategy is similar to that of the Target Income Global Bond Fund. In addition, the fund also invests in equity through the firm’s Global Focused Growth Equity Strategy and Global Value Equity Strategy.
“Demand in South Korea for stable returns has grown as the conditions of an ageing population, low birth rates and low interest rates require low-risk investment strategies,” Nick Trueman, head of institutional business, Asia ex Japan at T Rowe Price, said in a statement.
Should the security threat related to North Korea’s development of nuclear weapons intensify, foreign companies such as T Rowe Price could benefit from Korean investors’ desire to diversify away from domestic markets and toward the safety of global bonds.
The firm’s focus on building up the fixed income and mixed-asset offering reflects its view, expressed in an earlier interview by Thomas Poullaouec, head of multi-asset solutions for Asia-Pacific, that equities will face weaker upside prospects in 2018 than in 2017.
KIM is a privately-held asset management company established in Seoul in 1974, with $40bn in assets under management, according to the company’s statement.
KIM manages 223 mutual funds in Korea, with $12.4bn AUM, according to data from Morningstar. This makes KIM the seventh largest mutual fund provider in the country, commanding a market share around 4%.