By Yoon Ja-young
Staff Reporter
Overseas equity funds have recorded 4.7 trillion won in losses so far this year amid the global stock market plunge. Investors were especially damaged by plunges on the Chinese and Vietnamese bourses, popular investment destinations for Korean investors.
According to Korea Fund Ratings, a fund evaluating agency, 1,244 funds investing in overseas stock markets have seen 4.7 trillion won in losses so far this year.
Most of the losses were incurred by funds investing in the Asia Pacific region, including China, Vietnam and India ― they sustained 4.6 trillion won in losses.
Chinese equity funds, the most popular overseas funds among Korean investors, saw 3.7 trillion won in losses. Around one third of the overseas equity fund investment is directed toward the Chinese market. Funds investing in the Vietnamese bourse, which took a nosedive recently, sustained 371 billion won in losses. Vietnamese funds recorded 37.7 percent investment loss since the beginning of this year, showing the worst performance among overseas equity funds, as the market cap dwindled to half of what it was at its peak. India funds and Chindia funds ― ones investing in China and India ― recorded investment losses of over 20 percent.
Funds investing in the Americas, meanwhile, saw profits. Latin American equity funds made 222.1 billion won in return, and Brazil funds, rising as one of the most popular items among investors, saw 77 billion won. Funds investing in the Brazilian bourse have recorded 22.1 percent in investment returns on average so far this year. Those investing in bourses around Latin America saw a 13.6 percent investment return. Russian funds performed well amid the globally weak stock market, recording over 10 percent in returns.
Analysts estimated Brazil and Russia, both resource-rich countries, would continue leading the market amid global raw material price hikes.
``BRICs leadership is moving to Russia and Brazil from China and India, on high international oil prices,'' said Lee Kye-woong, a fund analyst at Goodmorning Shinhan Securities. He said emerging Europe, Latin America, and EMEA Funds, or ones investing in Emerging Europe, the Middle East, and Africa, will continue leading the market as they benefit from the rising raw material costs.
Korea Investment and Securities also advised investors to focus on Russia, South America, the Middle East and Africa, or energy and raw material sector funds. ``Aggressive investors are advised to allocate 15 to 20 percent of their portfolio to these funds,'' said Park Seung-hoon, an analyst at the securities firm.