Stock Funds Rebound Sharply With the Market Turnaround

Return rates on stock funds are jumping as Seoul stocks break out of their slump, financial analysts said Wednesday.

Domestic stock funds have attracted 64.3 billion won ($49.5 million) of new investment this month, with some stock funds recording return rates of more than 10 percent over only two months.

Stock funds for wage earners established at the end of last year have turned in good performances. The funds collect money from investors with regularly earned income and provide them with partial exemption from taxes.

One of these funds, operated by Templeton Investment Trust Management, has posted a 16.9 percent return rate since it was set up in the middle of last December; the Korea Composite Stock Price Index has risen 9.7 percent for this period. There was no stock fund of the kind recording net losses as of Saturday, according to the financial analysts.

Index funds are also bringing high returns. An index fund is a passively managed mutual fund that mirrors a specific index, such as the Kospi. One operated by Daehan Investment Trust Management Co. has recorded a 16.1 percent return rate over the last two months.

by Chung Jeh-won