India and Vietnam Funds Continue to Shine This Year

India and Vietnam Funds Rank 1st and 2nd in Returns Since Early This Year
Considered Promising Emerging Market Investment Destinations in 2024
India Expected to Continue Foreign Capital Inflows This Year

India and Vietnam funds have shown favorable returns in the new year, drawing attention to whether they will continue their high-flying momentum this year following last year. As India and Vietnam are considered promising emerging market investment destinations this year, a positive trend is expected to continue.

According to financial information provider FnGuide on the 11th, India funds recorded a year-to-date return of 3.46% as of the 8th, the highest among overseas equity funds with assets under management of 1 billion KRW or more, categorized by major regions. Vietnam funds followed closely with a 3.34% return. Over the past year, India and Vietnam funds posted strong returns of 28.79% and 11.25%, respectively. This strong performance appears to be continuing into the new year.

While emerging market funds are showing strength, developed market funds that soared last year are showing signs of hesitation at the start of the year. North American funds, which recorded the highest returns last year, have shown sluggish performance with a year-to-date return of -1.40%, due to fading expectations of interest rate cuts. The recent one-year return for North American funds had reached 43.12%. Japanese funds, which recorded a 30% return over the past year, also posted a year-to-date return of only -0.42%.

China funds, which underperformed last year, have yet to recover in the new year. The year-to-date return for China funds was -1.45%, with a recent one-year return of -21.21%.

India funds have also seen continuous inflows of capital. Since the beginning of the year, 30.3 billion KRW has flowed into India funds. Although North American funds have shown recent adjustments and weak returns, interest rate cuts within the year are considered a given, attracting capital inflows. Since the start of the year, 143.2 billion KRW has flowed in, the largest amount among major country funds.

India and Vietnam funds are regarded as the most promising investment destinations among emerging markets this year, and their strong performance is expected to continue. Namjung Moon, a researcher at Daishin Securities, explained, "Looking at regional preferences this year, the power of the Blue Dragon will be concentrated on emerging markets," adding, "India, Vietnam, and Mexico have created an investment environment where positive real policy interest rates can be achieved through inflation below policy rates, allowing for additional growth this year following last year." He further stated, "As the possibility of prolonged economic sluggishness in China increases, India, Vietnam, and Mexico stand out as alternative investment destinations due to their large populations as potential consumer giants, increased productivity through cheap labor, and political and geographical advantages in the competitive landscape between the G2 (the U.S. and China)."

In particular, foreign capital inflows into the Indian stock market, which has been on a steep rise since last year, are expected to continue this year. Seungwoong Shin, a researcher at Shinhan Investment Corp., said, "Although valuation pressures remain on the Indian stock market, there is still room for further growth," adding, "High economic growth rates, benefits from supply chain restructuring, and a surge in individual investors are long-term and structural drivers supporting the high valuation of the Indian stock market." He continued, "Last year, strong earnings growth compared to other emerging markets was the main reason foreign investors continued net buying despite a high interest rate environment, and with the start of U.S. interest rate cuts this year, foreign capital inflows into the Indian stock market are expected to accelerate further."

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