NH-Amundi Launches Pro-Korea Fund for Profit and Patriotism on Anti-Japan Wave

NH-Amundi Launches Pro-Korea Fund for Profit and Patriotism on Anti-Japan Wave

Major Korean asset manager NH-Amundi has launched a new fund that will invest in local suppliers that stand to benefit from Japanese export restrictions and donate part of the fees to local institutions developing such sectors.

In a move that spells profit and patriotism, NH-Amundi believes that the latest export curbs mark a turning point in South Korea’s economic history with regards to developing key local industries for parts, materials and equipment.

Last month, Japan imposed export bans on three key materials required for manufacturing memory chips and the Moon Jae-in government in South Korea has pledged further support to other potentially affected industries. NH-Amundi's fund will seek to invest in companies in some of these sectors due to the bright outlook for more domestic development.

In addition to semiconductors, NH-Amundi, which has about 40 trillion won ($33 billion) of assets under management, will also invest in secondary batteries, auto parts, display, shipbuilding and finance. It will also donate half of its performance fees (0.5 percent) to local universities focused on such materials and parts affected by Japanese curbs.

Conflict Effects Nor Fund is Short-Term

Its decision to launch the fund is no short-term matter, as signaled by the moves Moon’s government has made and the firm believes that following this turning point, development will continue even if tensions with Japan ease.

«Considering Japan’s export curb is becoming a threat to industries but also to national security, even if the conflicts between two countries are eased, the South Korean government and companies will continue to develop local industries for parts, materials and equipment,» said Heeseok Jung, manager for the fund that’s so far been allocated about $24 million since its inception on August 14, according to a «Bloomberg» report.

According to Jung, the semiconductor industry will be the major beneficiary of Moon’s support, currently only supplying 27 percent of its materials and equipment locally, followed by displays (45 percent).