Top fund yields come from U.S. and China

The United States and China topped the list of foreign equity funds with the highest yields while emerging market funds suffered from instability in Argentina and Turkey, and European funds took a hit over political instability in Italy.

China particularly benefited from debuting on the MSCI emerging market benchmark.

According to Korean fund evaluator KG Zeroin, Korea Investment & Securities’ KINDEX US Internet ETF (Synth H) posted the highest one-month yield for overseas equity fund as of June 4 with 7.89 percent. It was followed by Mirae Asset China Discovery with 7.22 percent and Mirae Asset China Growth Goal Convertible with 6.87 percent.

Among the top 10 overseas funds with the highest yields in the past month, two were investing in U.S. equities while seven were investing in China.

As of Friday, the average yield of funds investing in North America was 5.71 percent, highest among funds investing in other countries. China came in second with 5.32 percent.

One of the main reasons U.S. funds have been doing well is because of the favorable upswing in the U.S. market. Additionally funds investing in American crude production companies have been enjoying favorable yields.

China funds have also been seeing yields rise rapidly and might even overtake U.S. funds.

Since the beginning of this month, investments have been concentrating on China’s market since close to 230 China-listed stocks, or A-shares, debuted on the MSCI emerging market index, including the Chinese electric vehicle manufacturer BYD as well as the Industrial and Commercial Bank of China.

But emerging market funds haven’t been doing too well with the Vietnam equity fund yield at 0.23 percent while the India fund actually suffered a loss of 3.29 percent. The South American equity fund plummeted 12.52 percent due to rising economic concerns about Argentina and Brazil.

On Friday, the International Monetary Fund agreed to lend $50 billion to Argentina in exchange for reforms that could results in big layoffs. The support from the IMF was intended to prevent the crisis from spilling over to other South American countries.

Argentina, the third-largest economy in South America, has recently been considered a ticking time bomb with a huge budget deficit.

BY CHO HYUN-SOOK, LEE HO-JEONG [lee.hojeong@joongang.co.kr]