Korean funds rise to top as HK sinks to bottom
Korean funds rise to top as HK sinks to bottom
Nick Edwards, Reuters, Hong Kong
South Korean mutual funds were back on top in February, delivering the best month-on-month returns for investors in Asia of 9.6 percent and outpacing funds focused on Thailand and India, according to new industry data.
Korea's return to the top spot it secured as the best for fund investors in 2001 was at the expense of Indonesia, which slipped from first to fourth, data from fund tracking firm Lipper Asia, a Reuters company, revealed.
Indonesia-themed funds delivered an average of 5.01 percent to investors in February, anemic compared with January's jump of 20.03 percent, but still respectable compared to the Jakarta Stock Exchange which gained 0.4 percent over the month.
In the 15 Asian fund sectors analyzed, nine beat the Morgan Stanley Capital International (MSCI) Far East Free ex-Japan Index rise of 0.16 percent -- the key benchmark for most funds investing in the region.
The US$19.96 million Schroder Seoul fund, managed by British investment house Schroders, was the best overall fund returning 16.34 percent in February, 70 percent better again than the 9.61 percent rise in the value of Korea's KOSPI.
But while Korean funds -- consistent after their 9.45 percent growth in January -- were February's big winners on average, India-focused funds made strong individual showings, snagging three of the top five slots for single funds.
HSBC saw its Indian Growth and Indian Equity (US$) funds head the list of best performers in their 15-strong India fund peer group, with returns of 14.23 percent and 13.89 percent, making them Asia's second and third best funds in February overall.
SG Asset Management's Sogelux F Equities Indian Subcontinent fund also added 12.36 percent to rank fourth in the region.
Fund managers are generally positive about the prospects for India after a pro-reform budget, despite the worst religious riots in a decade and setbacks for the country's ruling Bharatiya Janata Party (BJP) in state elections last month.
"Within our regional model portfolio we continue to overweight India," ING Investment Management, which has some $30 billion of assets under management in Asia, said in a client note.
"On balance, the budget is pragmatic and (has) less rhetoric as compared to the budgets of the past," it said.
Funds focused on the smallest markets of Southeast Asia also had a broadly positive month, their second good showing in a row, though well down on January's leap upwards.
Thai funds scored the second highest average return in the region of 8.32 percent, compared with their third place 18.07 percent in January, and Philippine-themed funds made 3.35 percent in fifth place, versus January's 18.6 percent growth second spot.