China, Korea funds in Singapore suffer large losses
Lipper analyst Kenneth Koh expects more tough times ahead for funds as markets worldwide attempt to regain their footing.
Mutual funds registered for sale in Singapore posted an average 7.7% loss in January, according to Lipper data.
Equity funds led the decline, falling 11.73% in aggregate, with only the equity sector gold and precious metals funds showing a positive return of 1.55% on-average. Equity funds that invest in China and Korea posted average losses of 21.08% and 18.56%, respectively.
Bond funds finished last month down 0.23% on-average as declines in high-yield and convertible issues dragged down overall returns.
Kenneth Koh, Singapore-based head of research for Asia ex-Japan at Lipper, says markets are likely to remain volatile while they attempt to regain their footing, following the series of measures undertaken by the US Federal Reserve to stave off recession.
The US Federal Reserve trimmed its core interest rate a sharp 1.25% over two consecutive cuts in January, bringing the Fed funds rate to 3% in a bid to stave off recession, while announcing a huge fiscal stimulus package to restore consumer confidence.
ôWhile the moves have helped global bourses regain their footing somewhat, analysts are divided on their eventual impact. The markets may be seeing only a momentary respite amid a broader downtrend,ö says Koh. ôIn the meantime, US stocks have rebounded, following an offer by billionaire investor Warren Buffet to take on $800 billion in municipal bond risk from the three top bond insurers.ö
Still, Koh notes, if JanuaryÆs wild swings are any indication, increased stockmarket volatility will be the norm. ôFund investors should therefore stay vigilant and expect the unexpected,ö he says.
Average January performance of fund groups registered for sale in Singapore, by asset types:
Commodities +2.69%
Bond Funds -0.23%
Money Market Funds -0.60%
Protected Funds -1.58%
Hedge Funds -2.39%
Guaranteed Funds -3.16%
Mixed-Asset Funds -5.41%
Equity Funds -11.73%
Equity funds led the decline, falling 11.73% in aggregate, with only the equity sector gold and precious metals funds showing a positive return of 1.55% on-average. Equity funds that invest in China and Korea posted average losses of 21.08% and 18.56%, respectively.
Bond funds finished last month down 0.23% on-average as declines in high-yield and convertible issues dragged down overall returns.
Kenneth Koh, Singapore-based head of research for Asia ex-Japan at Lipper, says markets are likely to remain volatile while they attempt to regain their footing, following the series of measures undertaken by the US Federal Reserve to stave off recession.
The US Federal Reserve trimmed its core interest rate a sharp 1.25% over two consecutive cuts in January, bringing the Fed funds rate to 3% in a bid to stave off recession, while announcing a huge fiscal stimulus package to restore consumer confidence.
ôWhile the moves have helped global bourses regain their footing somewhat, analysts are divided on their eventual impact. The markets may be seeing only a momentary respite amid a broader downtrend,ö says Koh. ôIn the meantime, US stocks have rebounded, following an offer by billionaire investor Warren Buffet to take on $800 billion in municipal bond risk from the three top bond insurers.ö
Still, Koh notes, if JanuaryÆs wild swings are any indication, increased stockmarket volatility will be the norm. ôFund investors should therefore stay vigilant and expect the unexpected,ö he says.
Average January performance of fund groups registered for sale in Singapore, by asset types:
Commodities +2.69%
Bond Funds -0.23%
Money Market Funds -0.60%
Protected Funds -1.58%
Hedge Funds -2.39%
Guaranteed Funds -3.16%
Mixed-Asset Funds -5.41%
Equity Funds -11.73%
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