Domestic and International Stock and Bond Markets Weakness Leads to Consecutive Negative Fund Returns in the First Half of the Year

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[Asia Economy Reporter Lee Jung-yoon] In the first half of this year, both domestic and international stock and bond markets showed weakness, resulting in negative returns for related funds.

According to FnGuide on the 3rd, as of the 1st, the average year-to-date return of domestic equity funds with assets under management of 1 billion KRW or more was -23.74%. Domestic index equity funds, which aim to achieve returns similar to the index, recorded an average return of -25.05%.

Active equity funds, where fund managers exercise discretion to generate excess returns compared to the index, posted a return of -20.78%. Domestic bond funds with assets of 1 billion KRW or more also recorded an average return of -2.43% in the first half.

During the same period, overseas equity funds with assets of 1 billion KRW or more showed an average return of -16.92%. By region, most recorded negative returns: North America (-21.94%), Europe (-15.11%), Japan (-8.44%), and China (-7.77%). Russia was recorded at -60.93%.

Overseas bond funds also showed weakness with an average return of -8.85%. By region, emerging market bond funds suffered the largest loss at -17.29%, followed by Asia-Pacific region funds at -4.90%, and North American bond funds at -1.78%.

Looking at the performance of representative indices of each country in the first half, the Standard & Poor's (S&P) 500 Index (-20.58%), the pan-European Euro Stoxx 50 Index (-19.62%), the China Shanghai Composite Index (-6.63%), and the Japan Nikkei 225 (-8.33%) all declined.

Even narrowing the scope to only Exchange-Traded Fund (ETF) products, among 531 products with available year-to-date returns, 449 (84.55%) showed negative returns. Excluding the suspended 'Korea Investment KINDEX Russia MSCI' (-98.39%), the ETF with the lowest return was 'Mirae Asset TIGER KRX BBIG K-New Deal Leverage' (-61.39%). This product invests in 12 representative stocks across four domestic industries: secondary batteries, bio, internet, and gaming, and appears to have plummeted due to significant damage to growth stocks.

Despite poor returns, capital inflows into domestic and international funds continue. As of the 1st of this month, the assets under management of domestic equity funds reached 46.1048 trillion KRW, increasing by 3.5673 trillion KRW (including reinvestments) since the beginning of the year.

Assets in domestic bond funds stood at 30.8307 trillion KRW, up by 720.1 billion KRW during the same period. Overseas equity funds increased by 5.383 trillion KRW to 35.7604 trillion KRW. However, overseas bond funds decreased by 697.9 billion KRW to 4.3337 trillion KRW. By region, North American equity funds saw inflows of 3.042 trillion KRW, and North American bond funds received 131 billion KRW. Assets in Chinese equity funds also rose by 1.4086 trillion KRW, driven by expectations for growth stocks such as secondary batteries and electric vehicles. During the same period, ETF assets increased by 6.7299 trillion KRW to 68.6195 trillion KRW.

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