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Total investment in equity funds has nearly halved since 2007, the Korea Financial Investment Association said Tuesday.
The total investment managed by local equity fund managers stood at 85.4 trillion won ($80.4 billion) as of October 2013, compared with 140.2 trillion won in late 2008, when the local stock market was hit by the U.S. subprime mortgage crisis.
Equity fund investments are generally carried out against the stock price index, such as the KOSPI, as investors tend to buy them low, before the share prices pick up.
The amount includes all investment in both local and overseas equities that are managed by local operations.
While total equity fund investment plunged below 84 trillion won in late 2007, investors again poured their money into the funds during the 2008-09 global financial crisis.
Samsung Securities chief strategist You Seung-min said it was unlikely that the equity fund market would prosper like it did during the 2005-2006 and 2008-2009 periods.
“The economy is expected to recover, but further investment will be limited,” he said.
You also noted that rising domestic consumption would not necessarily spur more equity fund investment, as it would be countered by major structural factors, such as rising real estate costs, investor losses from Tong Yang Group’s liquidity crisis, and the snowballing household debt.
By Chung Joo-won (joowonc@heraldcorp.com)
The total investment managed by local equity fund managers stood at 85.4 trillion won ($80.4 billion) as of October 2013, compared with 140.2 trillion won in late 2008, when the local stock market was hit by the U.S. subprime mortgage crisis.
Equity fund investments are generally carried out against the stock price index, such as the KOSPI, as investors tend to buy them low, before the share prices pick up.
The amount includes all investment in both local and overseas equities that are managed by local operations.
While total equity fund investment plunged below 84 trillion won in late 2007, investors again poured their money into the funds during the 2008-09 global financial crisis.
Samsung Securities chief strategist You Seung-min said it was unlikely that the equity fund market would prosper like it did during the 2005-2006 and 2008-2009 periods.
“The economy is expected to recover, but further investment will be limited,” he said.
You also noted that rising domestic consumption would not necessarily spur more equity fund investment, as it would be countered by major structural factors, such as rising real estate costs, investor losses from Tong Yang Group’s liquidity crisis, and the snowballing household debt.
By Chung Joo-won (joowonc@heraldcorp.com)
