NH Investment and Securities Co. has decided to push the Mirae Asset Rogers Commodity Index Fund, which is focused on investments in industrial raw materials, including energy, minerals and farm produce. Experts are now counting on an economic recovery, which will fan the prices of those raw materials.
Analysts feel that the recent reductions in oil production by OPEC member nations will result in higher prices.
They also speculate that the prices of farm produce will rise, with investors preferring to place their funds in safer places while the Brexit talks are ongoing. There is also a high possibility for the development of La Nina to fan the prices of farm produce.
NH I&S has taken into consideration precious minerals, including diamonds and gold, as safe investment targets as investors look to place their funds in safer places while the EU contends with political confusion stemming from the Brexit talks and elections in some of the major EU member countries, such as Germany and France.
NH I&S plans to invest in the derivatives of products with higher returns, as projected by Rogers International Index Excess Return.
The RICI currently gave the weights by sectors as follows: Energy (40 percent), minerals (25.1 percent) and farm produce (34.9 percent). The RICI Committee updates those weights at the end of every month over the next year.
The fund is also protected against foreign exchange losses, as the won-dollar hedge strategy will be operated to protect the fund.
Manager Hwang Chang-yong of the NHIS Wealth Management Research said the investments should be diversified at a time such as now, when the prices of gold, oil and farm produce are stable, meaning they should be split up into diverse products for the sake of the safety of the fund.
Funds invested in oil saw a 30 percent fluctuation range over the past three years, but the Rogers International Commodity Index Fund had only a 14.1 percent fluctuation range, showing that the movement range is very low when investments are diversified over a wide range of products, the manager said.
NH Investment & Securities Co., Ltd., formerly known as Woori Investment & Securities Co. Ltd., is an investment bank. The company, through its subsidiaries, provides equity sales, trading, underwriting, hedge fund, research, and wealth management services. Additionally, it offers agency, assets management, credit-specialized financial, foreign exchange including intermediation, insurance agent and brokerage, investment brokerage, investment related consulting, and payment guarantee services.
The company also engages in loan agency, loan servicing, management of bond and security right of third parties, provision of retirement pension, money transfer, and trust services. It caters to individuals as well as institutional clients.
NH Investment & Securities Co., Ltd. was founded in 1969 and is based in Seoul, South Korea with NH Financial Holdings is planning to grow the new company into a stock firm representative of Korea and leading its capital market.
Once founded, NH Woori Investment & Securities will become the largest securities company in Korea with an equity capital of four trillion won (US$3.9 billion). The short-term goal of the company for the year of 2020 is 5.7 trillion won (US$5.6 billion) in total capital, 400 billion won (US$392 million) in current net income, 7.5 percent in return on equity (ROE), and 55 percent in wholesale rate.
At the same time, NH Financial Holdings is mulling over acquiring an additional asset management firm in order to shore up its financial investment business.
“We have complemented the securities side by means of Woori Investment & Securities, and our top priority will be asset management from now on,” said NH Financial Holdings chairman Lim Jong-ryong, adding, “We will further improve the efficiency of our banking operations, worth 200 trillion won in total, by beefing up the asset management part.”
NH Investment & Securities building in Yeouido. (Photos: NH Investment & Securities)