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Sizzling stock fund growth may cool

Dec 22,2007
Stock-based mutual funds will continue to grow next year, through not as fast as this year, Goodmorning Shinhan Securities said in a report it released yesterday.
The brokerage said the stock-based funds and emerging market mutual funds will churn out high returns as the total local mutual fund market reaches a total value of 350 trillion won ($372 billion) next year.
The local mutual fund market will climb 15 percent in the coming year, Goodmorning Shinhan Securities said in its forecast. This year, that market has grown nearly 30 percent.
“Though the mutual fund market will expand more slowly next year than it did this year, it will grow steadily, helped by domestic and foreign stock-based mutual funds,” said Lee Gye-woong, a fund research team leader at the brokerage. “Stock-based funds will account for 42 percent of all mutual funds, up from 37 percent this year, as the local market gets more similar to those of developed countries. Foreign stock funds will account for 46 percent of all stock funds.”
However, he said the growth rate for the stock-based mutual funds will be significantly lower than this year.
“The stock fund market will expand 30 percent next year, down from 142 percent, and the bond fund markets will be stagnant,” he said.
Lee said that due to concerns about the slowing economy all over the world, there will be a number of alternative funds that are safer, guaranteeing principal.
He recommended buying funds with diversified portfolios that invest in both growth and blue-chip stocks.


By Limb Jae-un Staff Reporter [jbiz91@joongang.co.kr]


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