Southeast Asian funds attract investors

By Kim Jae-won

Funds investing in stocks in the Southeast Asian countries are rising as they give higher returns, with foreign investors betting on the markets benefiting from Trans-Pacific Partnership (TPP) agreement, a local rating company said Thursday.

According to data from KG Zeroin, an average fund investing in the region has posted a 5.67 percent profitability rate so far this year, far higher than average overseas funds which saw an 8.1 percent loss during the same period. An average fund investing in local stocks saw a 0.16 percent profitability rate.

Market watchers attributed this to rising foreign investments in the region. Thailand’s benchmark index SER has risen 10.6 percent this year while the Philippines’ PSE increased 7.4 percent and Jakarta index of Indonesia hiked 7.3 percent during the same period thanks to increasing foreign investment.

Analysts said that the TPP deal will have big economic impact on the region as global manufacturers are expected to increase their investment there as goods produced in the region benefit from no tariffs when they are exported to the U.S. by the agreement.

Among local funds with more than 5 billion won of assets under management, NH-CA Indonesia Focus (Equity) Class C topped the profitability list with 10.73 percent. KB ASEAN (Equity) A came second with 6.96 percent, followed by Samsung ASEAN 2 (Equity) A at 6.92 percent.

But, experts said that investors need to be careful in investing in the funds because stock markets in the region could tumble if the U.S. Federal Reserve hikes its key interest rate. The Fed had kept its rate at 0.25 to 0.5 percent this month, but opened the door for a further rise next month.

Others said that stock markets in the ASEAN countries will continue to grow, replacing those of China which have been volatile since last year. The Chinese government also announced that it aims to make its economy grow by focusing on the domestic market.