Korea Investment, Mirae Asset Funds Post Weak Losses By Park Hyong-kiStaff Reporter
An installment-type fund investing in equities of Samsung companies managed by the Korea Investment Trust Management posted the highest rate of capital erosion.
According to the Asset Management Association of Korea Monday, the fund has recorded a 22 percent investment loss as of last week.
Of 596 equity funds each with over 10 billion won in assets under management (AUM), the association noted 54 percent are reporting losses.
It said of 322 funds posting in the negative zone, 173 are domestic equity funds, while the rest are overseas funds.
If the fund is recording gains, its net assets should be higher than the total value of customers assets managed by asset management companies.
The net assets of Korea Investment's Samsung fund posted 2.9 trillion won, less than its assets under management at 3.7 trillion won.
The gap between net assets and AUMs of funds on the market reached 2-3 trillion won on average amid a steep market corrections on credit woes.
Of the top 10 biggest investment losses, funds managed by Mirae Asset Investments, the country's biggest mutual fund operator, accounted for 70 percent. Its Discovery equity fund recorded a 20 percent loss, followed by the Independence's loss at 17 percent. Other funds in the top 10 losses included the Bonjour China Fund of Shinhan BNP Paribas and the BRICs Fund by Schroders.
Analysts say investors should beware of the fact that they could lose their principal in times of financial uncertainties worldwide, advising to increase their risk management by diversifying their investments and lowering their expectations of returns this year.
However, they expect a fresh flow of money to steadily pour into equity funds this year.
``Despite growing volatility, we can expect investments in funds to increase on bargain hunting,'' said Kim Hak-kyun, an analyst of Korea Investment & Securities.