Asian equity funds lose US$77bil as stocks plunge

HONG KONG: Asian equity mutual funds suffered a US$77bil hit in the first 11 days of August, with those betting on South Korea and the Greater China region leading the declines amid a global sell-off on concerns over US growth and a European debt crisis.

Large bets on energy and financial stocks, which bore the brunt of the sell-off, hurt funds from money managers Franklin Templeton and Fidelity, who were the biggest losers in absolute terms.

Funds investing in South Korean shares lost about 15% of their net asset values on average, data from global fund tracker Thomson Reuters Lipper show. Those betting on shares in Greater China region lost an average 10.4%.

Among those managing US$1bil-plus, South Korean funds led the decline with eight of the top 10 losers investing in the country which saw its shares plunge by 15% in the first 11 days of August as panicky investors exited in search of safe-haven investments on fears of a 2008-like recession.

“We've seen a sharp adjustment in expectations for global growth and it's come about in a very short period of time, obviously stimulated by concerns over sovereign debt issues,” said Mark Konyn, Asia Pacific chief executive for RCM, in a Reuters Insider interview on Friday.

Among US$1bil-plus South Korea-focused funds, the US$1.7bil JPMorgan Korea Trust Equity Class A was the biggest loser, shedding 19.26% of its net asset value.

The US$1.15bil Henderson China Opportunities Ret Acc was the top loser among Greater China-focused funds managing more than US$1bil, down 13% in the first 11 days of August. - Reuters