Investors have added a net 4.23 trillion won (US$3.58 billion) into the hybrid funds as of Aug. 13, which lured 1.17 trillion won last month alone. (image: Kobiz Media / Korea Bizwire)
SEOUL, Aug. 18 (Korea Bizwire) — Hybrid funds with a mixed portfolio of stocks and bonds have been absorbing money as investors prefer relatively safe vehicles with higher yields over fixed deposits that offer record-low interest payments, data showed Tuesday.
Investors have added a net 4.23 trillion won (US$3.58 billion) into the hybrid funds as of Aug. 13, which lured 1.17 trillion won last month alone, according to the data compiled by fund researcher Zeroin.
In contrast, a net 5.38 trillion won exited mutual funds that invest in local equities during the period, it said.
The mix portfolio has emerged as a convenient instrument to gain exposure to both equities and bonds after the Bank of Korea lowered key interest rates in March and June to a historic low of 1.5 percent.
The average yield rate of the hybrid funds was at 4.19 percent as of Aug. 13, much higher than interest rates on fixed deposits that hover below 2 percent.
The hybrid funds have increasingly attracted funds as investors remain cautious over riskier assets while the U.S. Federal Reserve is on track to raise interest rates later this year, which could weigh down the financial market.
“Investors who deliberate between stock funds and fixed deposits seem to have shifted their funds to hybrid funds under the low interest rate environment,” Oh On-soo, a researcher at Hyundai Securities, said.
(Yonhap)
