Overseas Stock Funds That Benefited Last Year Down 20% in a Month... "It's Not Over"

Temporary Decline Judged
Nearly 300 Billion Won Recently Net Bought

Russia and Brazil Down by 20% Range
North American Funds Also Fall Over 10%
High Possibility of Further Losses Ahead

[Asia Economy Reporter Oh Ju-yeon] As the novel coronavirus infection (COVID-19) swallowed the global stock market, overseas stock fund returns also plummeted without exception. Domestic investors, viewing the stock market decline caused by COVID-19 as temporary, have recently net purchased nearly 300 billion KRW in overseas stock funds over the past month, but returns have dropped by more than 20% depending on the country. North American funds, which delivered an average return of over 20% last year and were among the recommended portfolios this year, fell by 10% in just one month as the U.S. stock market continued its historic plunge. The problem is that the nearly 10% crash in the U.S. stock market on the 12th (local time) has not yet been reflected in these returns, and further stock price declines may increase the scale of losses.

According to financial information company FnGuide on the 13th, 277.9 billion KRW flowed into overseas stock funds over the past month. In just one week, 51.3 billion KRW was poured in. Despite the ongoing stock market decline due to COVID-19, investors who believe in a rebound after a short-term bottom have increased their holdings. In particular, North American funds attracted 102.9 billion KRW in one month, accounting for the largest share.

However, contrary to investors' hopes, returns were severely damaged. The average return of overseas stock funds fell by 13.16%. By country, Russian stock funds experienced the largest drop with a return of -24.20%, while Brazil and Vietnam also declined by 22.48% and 11.67%, respectively.

Japanese stock fund returns also fell by 19.96%, significantly exceeding the average loss rate. In Japan's case, the GDP growth rate in the fourth quarter of last year was -7.1%, and due to the impact of COVID-19, uncertainty over the scheduled Tokyo Olympics this year has increased, causing the stock market to decline daily.

European stock funds, where the increase in COVID-19 confirmed cases is just beginning, posted returns of -20%. This means that one-fifth of the investment was lost in one month. In particular, emerging European stock funds recorded a one-month return of -23.04% and plunged 15.12% in just one week.

Among global stock funds, North American stock funds, considered 'blue-chip stock funds,' also recorded a one-month return of -11.19%, with all overseas stock fund returns severely damaged. As COVID-19 confirmed cases surge in Europe and the U.S., concerns over consumption slowdown are rising, and with the suspension of exchanges with Europe, the possibility of economic contraction in the U.S. and Europe is increasing, causing the stock market to plunge repeatedly. Moreover, with the spotlight on Europe's economic recession crisis, the global stock market is in a state of panic.

Following the Dow Jones Industrial Average's 9.99% plunge?the fourth largest single-day drop in history?and bleak forecasts that the global GDP could shrink by up to 10% this year, concerns over further declines are growing rather than expectations of recovery. Kiwoom Securities researcher Seo Sang-young diagnosed, "The problem is the uncertainty about COVID-19," adding, "No one knows how much impact it will have on the global economy, nor how this impact will affect not only the economy but also society, culture, and diplomacy overall. This uncertainty is making decision-making more difficult than usual."

This content was produced with the assistance of AI translation services.