Stock mutual funds highly profitable

TOP EARNERS::Investments have increasingly been made in the growing ASEAN region and real-estate markets, resulting in the highly profitable stock mutual funds

Staff writer, with CNA

Mon, Dec 31, 2012 - Page 14

Despite the weakness of the global economy, more than 90 percent of about 1,100 mutual funds either targeting the local bourse or its overseas counterparts have been profitable so far this year, JPMorgan Asset Management said on Saturday.

The statistics released by the fund management firm showed the average return of the stock mutual funds hit 11.05 percent, while the return of the 10 most profitable funds among the 1,100 funds even topped 37 percent. The 10 top earners have largely invested in the fast-growing ASEAN and real estate in the Asian markets, JPMorgan Asset Management said.

Pauline Ng (黃寶麗), a fund manager with the JF ASEAN Fund, said although a sluggish global economy has hurt global exports, bilateral trade growth among the 10 ASEAN member countries remained solid and investments in the region still grew. As a result, Ng said, stock markets in the ASEAN region have been defensive during the global economic downturn and served as a safe haven for investors. The stock markets in the region have posted gains for four years in a row, she added.

According to Ng, this year the bourses in the Philippines and Thailand, two of the 10 ASEAN members, have risen about 30 percent, while net foreign institutional buying in the two markets have hit a new high since 2008. Furthermore, she said, the MSCI Southeast Asia Index has added more than 20 percent so far this year.

Investments in the ASEAN region have begun to pick up since 2010 with investors eyeing the property and industrial sectors, and fixed private investments have accounted for more than 20 percent of the region’s GDP, Ng said. The 10 member countries in the bloc have made intensive efforts to knock down most trade barriers to facilitate export growth in the region and last year bilateral trade made up 25 percent of the region’s GDP.

With China, Japan, South Korea, India, Australia and New Zealand to join the ASEAN Free Trade Area, the bloc’s GDP is expected account for almost one-third of the world’s, Ng said.

Jeffery Roskell, a fund manger with the JF Asia Pacific Income Fund, said as the US property market has showed signs of a recovery amid rising liquidity, many real-estate investment trust funds have recorded solid gains so far this year.

Roskell said since major central banks, including the US Federal Reserve, have kept injecting funds into the market, the Asia-Pacific region has benefited from a spill-over effect with massive funds having entered the region.

The fund manager said ample liquidity has prompted many investors to park their money in real estate located in the area.