Europe Focused

 

Fund data provider FnGuide announced on Oct. 12 that the 49 funds each investing at least 1 billion won (US$870,130) in Europe and available in Korea have recorded an average return of 7.45 percent this year, similar to those investing in Japan and Russia. It added that five out of the 12 non-index and non-ETF stock funds for overseas investment that have posted a return of at least 10 percent since the beginning of this year are those investing in Europe, including Fidelity Europe (15.32 percent), Eastspring European Leaders (13.15 percent), and Hana UBS Europe Focus (11.40 percent). The Shinhan BNPP The Dream Asia topped the list with a rate of return of 17.17 percent, and was followed by two Russia-focused and two global funds.

Europe-focused funds’ excellent performance can be attributed to the inflow of money into the region based on investors’ preference for risk-free assets. Last week alone, stock funds investing in Western Europe recorded a net inflow of US$1.96 billion, thanks to expectations for an economic recovery to follow the ECB’s quantitative easing. The region’s high level of currency stability is attracting investors, while uncertainties are still lingering with regard to the Chinese economy, and the Fed is about to raise interest rates.

Under the circumstances, the Europe-focused funds fared well in the third quarter, when global stock markets faced a high level of volatility. Those funds recorded an average return of -2.96 percent in that quarter, whereas the average of all overseas stock funds was -8.85 percent. Half of the top 12 during the period were Europe-focused funds, including the JP Morgan Europe with a return of over 2 percent.

In the meantime, Russia funds have been sticking out throughout this year, too. Their average rate of return for this year is 7.70 percent as of now. On the contrary, Brazil and China funds lost much of their earnings in the third quarter.

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