Has mentioned in the launching of our first contract as advisors, the SICAV - Optimize Invest Selection is a balanced fund portfolio oriented for long-term savings composed of equity funds and bond funds. It is exposed to shares from the Eurozone countries; Switzerland; Sweden; United Kingdom; Russia; Japan; South Korea and Canada.
The Fund bears to European High Yield, US Dollar, American High Yield, Norwegian Krone, Swedish Krona and Japanese Yen in the bond component.
Perspectives
Like its Chinese and Japanese neighbours, South Korea has been successful in dealing with the covid-19 pandemic. This chosen path had implications in the dynamics of the country's growth in the short term. The country's contagion and death rates are among the lowest in the world. Hence, with better pandemic management, the Korean economy declined only 1.9% last year.
Unlike most Western countries, a top-level lockdown in South Korea doesn't mean a complete shutdown. Still, the authorities are vigilant against a possible escalation of the situation and will implement more restrictive measures if necessary.
By 2021, South Korea will recover from losses, with its GDP growing by 2.9%. So, economic activity is likely to revert to pre-pandemic levels faster than in most nations.
The country, which began as a typical emerging economy, is now synonymous with technology, engineering, research and development. South Korea currently possesses a highly competitive level and owns one of the world's best education systems.
Of course, the pressures on China are good news for Korean competitors, especially in the area of semiconductors. Korean car manufacturers are also on the rise, benefiting from the bet on electric vehicles.
Strategic allocation
The Korean stock exchange constitution is represented by 44% in information technology, communications, and non-essential consumer goods account for 10% of the index. Thus, South Korea offers exposure to innovative and promising sectors driving the recovery of markets.
To diversify our portfolio and incorporate a market with growth potential, we allocate 5% of South Korea shares through the exposure of an ETF or investment funds.
Definitions:
Mutual fund – A mutual fund is a professionally managed financial product – investment fund - that gathers money from many investors to buy securities: bonds, share or both. The advantage of this product compared to direct investment - direct purchase of shares or bonds - is that by joining many investors, the amounts available to invest considerably increase, which reduces costs and diversifies the investment (a more significant number of securities purchased).
This option is the most recommended for those who do not have much money (tens of euros are enough to invest), time to monitor the investment very regularly on a daily basis (there are fund managers who do this for you) and who have little knowledge of the financial markets.
ETFs - An exchange-traded fund is an investment fund traded on the Stock Exchange as if it were a stock. An ETF can also be called an index fund. Most ETFs track an index, such as a stock index or bond index