Overseas Fund Profits Double... US Surpasses China

Non-face-to-face and Bio Momentum Drive US Fund Monthly Return to 8.20%
China Lags Global Funds at 4.45%

[Asia Economy Reporter Oh Juyoun] As the stock market rapidly recovered after the novel coronavirus infection (COVID-19), overseas stock fund returns also turned positive (+). Among them, the U.S. fund returns were about twice as high as Chinese funds, which had been highlighted by the securities industry earlier this year.

According to financial information company FnGuide on the 9th, the average return of North American funds over the past month reached 8.20%, significantly surpassing the average return of Chinese funds at 4.45%. In the recent three months before the pandemic declaration of COVID-19, China showed -0.44%, while North American funds reached 6.95%, showing a contrast. This is interpreted as the non-face-to-face (untact) and bio industries leading the stock market after COVID-19, with most of these innovative companies listed on the U.S. stock market.

Seonghwan Kim, a researcher at Shinhan Financial Investment, said, "The revaluation of leading stocks represented by FAAMG (Facebook, Apple, Amazon, Microsoft, Google) is ongoing," adding, "They have solidified their position further due to accelerated digital transformation after COVID-19, and the trust in their growth is high, leading the structural change of the U.S. stock market." The market capitalization ratio of FAAMG in the U.S. stock market has increased from 10% five years ago to 22% currently.

Younghan Lee, a researcher at Daishin Securities, said, "Although protests against racial discrimination and U.S.-China conflicts are intensifying, the U.S. stock market is more influenced by expectations of economic recovery," and diagnosed, "Risk appetite in the U.S. stock market continues based on accommodative monetary policy that raises liquidity expectations and fiscal policy momentum such as additional tax cuts introduced by the Trump administration."

On the other hand, the Chinese stock market has shown mixed trends amid the U.S.-China trade dispute following the COVID-19 impact and expectations for economic stimulus measures, underperforming compared to the global stock market. This was directly reflected in fund returns. The recent one-month return of Chinese funds was lower than those of Vietnam (11.42%), Japan (11.86%), Europe (11.40%), Russia (11.09%), and India (6.63%). Compared to emerging Asia funds, which yielded 12.95% as global stock market funds flowed into emerging countries, the upward momentum of Chinese funds significantly lagged. However, there is also analysis that the Chinese stock market is worth attention in the future due to expanded external openness and increased inclusion of Chinese stocks in overseas indices.

Kihyun Park, a researcher at SK Securities, predicted, "Continuous inflow of foreign capital can be a strong driving force for a robust stock market rise." Kyunghwan Kim, a researcher at Hana Financial Investment, also expected, "In June, the yuan and Hong Kong risks, which were vulnerable to President Trump's offensives, will gradually diminish, and fundamental recovery and fiscal policy effects will be prominently highlighted."

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