US and Japan Soar, China Declines... US, China, and Japan Funds See Mixed Fortunes

North American Funds Lead with 35.02% Return Since Early Year
Japanese Funds Soar Amid 33-Year Stock Market Rally
China-Related Funds Lag Due to Delayed Economic Recovery

The global stock markets have generally shown a favorable trend, and overseas investment funds are also recording good returns. In particular, North American and Japanese funds, which have been thriving as the stock markets hit new highs this year, are experiencing soaring returns. In contrast, Chinese funds are showing sluggish performance due to delayed economic recovery.

According to financial information provider FnGuide, as of the end of last month, North American funds posted a year-to-date return of 35.02%, achieving the highest return among overseas equity funds with assets under management of over 1 billion KRW categorized by major regions. Japanese funds followed with a 23.25% return. Additionally, funds from Brazil (20.00%), Vietnam (17.86%), Europe (12.03%), and India (10.64%) also recorded double-digit returns.

On the other hand, the poor performance of China-related funds stood out. Among 20 regional funds, only three recorded negative returns: China (-2.12%), Greater China (-15.03%), and Chindia (-1.62%) funds. All of these are China-related funds.

North American funds achieved high returns this year thanks to the US stock market's strength, centered on tech stocks, as concerns over tightening, inflation pressures, and recession fears eased. The Nasdaq rose 36.79% year-to-date, and the S&P 500 index also increased by 19.34%.

The Japanese stock market also showed strength, hitting a new high for the first time in 33 years. The Nikkei 225 index rose 27.12% year-to-date. On the 3rd of last month, it closed at 33,753.33, marking the highest closing level since March 9, 1990, after 33 years.

In contrast, the Shanghai Composite Index in China only rose 6.04%. Early this year, China abandoned its "zero-COVID" policy and relaxed quarantine measures, raising expectations for reopening (resumption of economic activities). However, the reopening effect fell short of expectations, and recession concerns increased, leading to a sluggish stock market. The Manufacturing Purchasing Managers' Index (PMI) released by China's National Bureau of Statistics on that day was 49.3, falling below 50 for the fourth consecutive month, indicating a continued economic contraction phase.

Nevertheless, expectations for China's economic recovery remain valid. Since the beginning of the year, 375.7 billion KRW has flowed into Chinese funds. On the 24th of last month, the Chinese Politburo meeting revealed the government's continued commitment to stimulus, and depending on the concretization of policies, it is expected to have a positive impact on the stock market. Kim Kyunghwan, a researcher at Hana Securities, analyzed, "The pessimism about China's fundamentals and asset markets in the first half of the year was due to concerns over the prolonged structural problems. The aftereffects of the COVID-19 pandemic and industrial regulations on households and companies in the first half exceeded market expectations, while the government's policy priorities and proactiveness fell short of expectations." He added, "With the N-shaped recovery of China's economy starting in the second half, a recovery in the yuan, short- and long-term interest rate differentials, commodity prices, and the stock market is expected in the third quarter."

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