High-Yield Reo-Beu Fund... Investor Sentiment Is 'Not So Sure'

Despite Ranking 1st-2nd in Returns Among 20 Regional and National Funds, Capital Outflows Continue

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[Asia Economy Reporter Kum Boryeong] Although the returns of Russian and Brazilian funds are showing strength, investment sentiment appears subdued as capital outflows continue.

According to fund rating agency FnGuide on the 16th, as of the previous day, the one-week return of Russian funds recorded 3.24%, ranking first among 20 regional and country funds. The one-month return was 10.94%, and the three-month return was 11.84%, placing it among the top performers.

Brazilian funds are also showing favorable returns. The one-month return of Brazilian funds was 2.96%, ranking second after Russian funds, but the one-month return was 16.51%, ranking first overall. The three-month return was also relatively high at 14.29%.

Looking at individual funds, the one-month return of 'Mirae Asset Index Russia Securities Investment Trust (Stock) Type C-e' was 12.86%, and 'Multi Asset Samba Brazil Securities Investment Trust [Stock] A' reached as high as 22.26%.

Since November, the Russian and Brazilian stock markets have shown a sharp rise. The Russian RTS index rose 30.36% from 1066.60 on October 30 to 1390.46 as of the previous day. The Brazilian Bovespa index also jumped 23.62% from 93,952.4 to 116,148.63 during the same period.

Russia and Brazil have attracted attention due to the notable strength in commodity prices. Russia is considered a commodity powerhouse producing natural gas and crude oil, while Brazil produces iron ore and other raw materials. The inflow of foreign capital seeking currency gains was also one of the factors driving up stock prices. The Brazilian real fell from 5.75 per dollar in early November to 5.11 per dollar.

However, as the stock market performs better, investment sentiment toward these funds remains low. The assets under management of Russian funds decreased by 3.7 billion KRW for one week, 14.1 billion KRW for one month, and 10.5 billion KRW for three months. Brazilian funds also saw outflows of 100 million KRW over one week and 2.4 billion KRW over one month.

Risks remain. In particular, Brazil shows limits to further improvements due to a lack of policy capacity. Kim Minhyung, a researcher at Mirae Asset Daewoo, explained, "For the Brazilian real to rebound further, restoring fiscal soundness is important, so improving the fiscal balance through economic recovery or additional structural reforms is necessary. However, considering the current political situation in Brazil, structural reforms are expected to be difficult, so fiscal risks in Brazil are expected to continue next year."

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