Funds invested in overseas assets far outplay Korean portfolio last year

2020.01.14 13:42:12 | 2020.01.14 13:43:01

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Funds placing money in overseas securities delivered more than double returns than investments in Korean ones, underscoring the lackluster performance of the Korean bourse compared to its overseas peers.

Funds invested in foreign equities yielded 25.37 percent last year while those parked in local stocks delivered 9.18 percent, according to data released by Seoul-based market tracker FnGuide on Monday on funds with assets more than 1 billion won ($867,745).

The average return rate of funds investing in overseas mixed assets amounted to 12.26 percent last year, far outplaying domestic mixed asset funds that yielded 4.20 percent. Funds investing in foreign debts delivered 9.25 percent return, higher than a 2.40 percent return of domestic bond funds.

Funds investing in local assets underperformed the overseas funds because the growth of the Korean stock market lagged far behind that of other markets. The nation’s main Kospi market added 9.33 percent from 2,010.00 in the beginning of 2019 to 2,197.67 at the end of the year, while the U.S. S&P500 surged 28.71 percent from 2,510.03 to 3,230.78 and recorded its highest gain in six years.

“The Korean stock market began falling behind other markets in 2018 due to the double whammy of the U.S.-China trade war and weak IT industry,” said Lee Kyung-min, an analyst from Daishin Securities. “The market continued its sluggish performance in 2019 as a large portion of investments was drawn to bonds amid concerns on global economic slowdown and monetary easing trend.”

By Ahn Gap-sung and Choi Mira

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