Indian Funds Vs. Chinese Funds
This year, Chinese and Indian funds are putting up a good fight in the Korean financial market, surpassing yields of 20%, respectively. The two show a difference in the size of money flows into and out of them. Though about 2.4 trillion won (US$2.1 billion) flew into Indian funds, 810 billion won (US$729 million) went out of Chinese funds. Analysts say investors began to buy back without feeling any regret to make up for losses incurred after China's stock market collapsed in 2015-2016.
According to financial information company FN Guide on July 27, the earning rate of Indian funds (26) since the beginning of the month hit 22.38%. In the same period, that of Chinese funds (168) also recorded an increase of 20.5% in earnings. The two placed first and second in yield rates by nation. The recent three-month yield rates were also good with 11.82% by Chinese funds and 4.52% by Indian funds.
However, there was a clear difference in fund flow volume. Indian funds have had a net inflow of 241.1 billion won (US$216 million) this year. The amount of established funds set at 369.6 billion won (US$332 million) at the beginning of the year shot up to 610.6 billion won (US$549 million). Over the past three months only, 106.7 billion won (US$96 million) flew in Indian funds.
On the other hand, Chinese funds have been as good as Indian funds in terms of earning rates, but they are suffering from redemption. This year, a repurchase of 816 billion won (US$734 million) has been made this year. The three-month net outflow added up to 384.9 billion won (US$346 million).
The massive money flow out of Chinese funds is blamed on investors’ loss of trust in Chinese funds. The Hong Kong H index, which determines yield rates of many Chinese funds, surpassed the 28,000 mark in May 2015, but then declined to the 18,000 level in February of the following year. As the index nosedived more than 35%, Chinese fund investors sustained huge losses.
Money keeps on flowing into Indian funds as experts evaluate that India’s prime minister Narendra Modi's economic reform policies will pay off in the future while forecasts are strengthening that the reform policies will accomplish India’s stable growth. "The majority’s view is that both the Chinese and the Indian stock markets will grow," an industry official said,