India equity funds top overseas stock funds in S.Korea

India equity funds registered in South Korea have doubled their investors' wealth over the past five years, luring high-net-worth individuals looking for alternatives to the Chinese stock market, data showed.

The net asset value of 28 India equity funds in South Korea has ballooned to 2.056 trillion won ($1.5 billion) from their original investment of 1.0 trillion won during the period, according to data provider FnGuide on Monday. It was the first time their net asset value surpassed 2 trillion won.

They returned 34.13% on average per annum, just shy of US equity funds’ gain of 36.43%. US funds were the top performer among overseas equity funds on an annual basis.

Their returns significantly beat an 18.51% gain from Vietnam funds and contrasted with a 26.04% loss from Chinese funds.

By net asset value, India equity funds ranked third after US stock funds with 22.57 trillion won and Chinese stock funds with 5.19 trillion won.

THREE-YEAR PERFORMANCE

On a three-yearly basis, India equity funds topped the list of overseas stock investment funds in the country in terms of performance, generating an average return of 62.16%.

Equity funds investing in the US and Japanese stock markets returned 41.23% and 31.84%, respectively, over the past three years.

By fund, Samsung India's small-cap FOCUS fund was the top performer with a return of 59.86%, followed by Mirae Asset Pension India Infra (50.69%), Shinhan India (30.76%) and Fidelity India (28.38%).

The equity-traded fund “KOSEF India NIFTY50” logged a 23.61% return.

“India is classified as an emerging market fund but delivered steady returns unlike US funds with heavy fluctuations,” said a private banker at a brokerage company branch in the affluent Gangnam district in Seoul.

“Funds with mid- to long-term targets such as retirement pensions are steadily flowing in (India equity funds),” he added.

South Korean investors are expected to pour more money into Indian investment funds after the country’s leading asset manager Mirae Asset Financial Group acquired Sharekhan Ltd., India’s 10th-largest brokerage firm, for 30 billion Indian rupees ($360 million) last December.

As of September last year, Mirae Asset managed 22 trillion won ($16.7 billion) in India and ranked No. 1 among overseas investment firms there.

Morgan Stanley forecasts India to grow to the world’s third-largest stock market by 2030. Its economy is projected to grow 6.5% this year, according to the International Monetary Fund, higher than the estimated global economic growth of 3.1% and the projected 4.6% expansion for China.

India’s stock market capitalization exceeded $4 trillion as of the end of January, beating that of the Hong Kong stock market.

Write to Man-Su Choe at bebop@hankyung.com
 


Yeonhee Kim edited this article.