The average yield of small and mid-size equity funds was 12 percent during the first quarter, according to the JoongAng Ilbo’s fund evaluation yesterday. Given that the Kospi and Kosdaq rose 2.7 percent and 2.9 percent, respectively, during the same period, small- and mid-size equity funds enjoyed a relatively strong performance.
“Small- and mid-sized enterprises that supply products to major corporations that posted record high earnings last year showed strong performances,” explained Kim Hu-jung, analyst at Tong Yang Securities. “Funds that include such SMEs posted high yields.”
Market observers highlight the fact that small- and mid-size equity funds have done exceptionally well amid the fluctuating stock market in the first quarter. The global stock market, including the local one, suffered from many external variables, from the Middle East crisis to the catastrophic earthquake and radiation leakage in Japan.
Small- and mid-size equity funds showed much better performances than funds investing in large-cap stocks because investors tend to withdraw their investments from large-cap equity funds once the stock market rises to a certain level.
“The deteriorated yield [of large-cap equity funds] has caused a vicious cycle of fund outflows,” explained Suh Dong-pil, analyst at Woori Investment & Securities.
Moreover, small- and mid-size equity funds have traditionally showed robust performances in January, which also helped them to post strong performances in first three months of the year.
Meanwhile, domestic equity funds have done relatively better than funds investing in overseas stocks in the first quarter. According to fund evaluators, the average yield of overseas equity funds in the first quarter stood at 0.17 percent while that of domestic equity funds was 4.34 percent during the same period. Analysts said that investors took out their investments from overseas equity markets on growing uncertainties around the globe, such as rising oil prices and concerns about Japan. But Russian and Eastern European funds did well. For the latest updates PRESS CTR + D or visit Stock Market news Today
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