Inside the Wardrobe 'Indo Fund'... Uncovered as a 'Goldmine'

[Asia Economy Reporter Junho Hwang] # Song Gwang-ho recently opened his Indian fund account, which he had joined five years ago, after being alarmed by the spread of the COVID-19 Delta variant in the India region, only to be amazed. The returns had exceeded 100%, turning it into a veritable 'gold mine.' He decided to sell it and use the proceeds for his summer vacation fund.

Indian equity funds are recording soaring returns. According to fund evaluator Zeroin on the 14th, Mirae Asset Global Investments' India Small & Mid Cap Focus Fund posted a cumulative return of 160.12% over the past five years. The fund's return over the past year was 78.65%, and over the past six months, it reached 36.24%.

Although the returns are lower than this fund, Samsung Asset Management's India Fund (2) also recorded a 110.14% return over the past five years. Over the past year, it posted a 61.99% return, and over six months, 25.38%. Excluding pension funds and exchange-traded funds, the average return of 15 Indian equity funds over the past year was 58.44%.

It is true that concerns have grown due to the resurgence of COVID-19, including the initial occurrence of the Delta variant in India. According to the local influential media Times of Korea, on May 9th, the 5-day average of confirmed cases was 402,716, raising concerns about the resurgence of COVID-19. However, as of the 13th of this month, the 5-day average of new confirmed cases has decreased to 39,252, suggesting that the spread phase has calmed down. Mirae Asset Global Investments' India branch analyzed, "The stock market is being stimulated due to the decrease in confirmed cases, expanded vaccination, the Reserve Bank of India's maintenance of the base interest rate at around 4%, and the government's announcement of a 3 billion rupee (4.62 billion KRW) economic stimulus package."

The Indian Sensex index surpassed the all-time high of 53,000 on the 7th. The closing price on the 13th was 52,769.73. During last year's COVID-19 pandemic, the stock market, which was at the 41,000 level, plunged to 27,000, but then rose to 37,000 in July last year and surged to 46,000 in January this year. Due to the stock market boom, 10.7 million new securities accounts were created over the past year. The total number of stock market accounts last year is estimated to be 28 million.

Although the overall trend is bullish, there are opinions that cautious approaches are necessary due to recent inflation concerns. Jang Hyun-joon, a manager at Samsung Asset Management, forecasted, "Although the stock market stimulus continues, the inflation rate is higher than the government's target, and we need to monitor the trends in the global supply chain."

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