Synopsis
South Korean investors are heavily investing in U.S. stock funds, buoyed by expectations that President Trump's 'America First' policy will enhance the market. Recent data indicates substantial growth in fund management, with local investors enjoying impressive returns amidst a backdrop of economic fluctuations.Key Takeaways
- Investors are heavily investing in U.S. stocks.
- Trump's policies expected to boost the economy.
- U.S. stock funds delivered a 34.1% average return last year.
- Luxury goods sales in South Korea continue to rise.
- Domestic stock funds faced significant outflows.
Seoul, Jan 28 (NationPress) Investors are significantly channeling their funds into U.S. stock investments, fueled by optimism that President Donald Trump's 'America First' initiative will enhance the U.S. stock market, as indicated by data released on Tuesday.
As per information from market analyst FnGuide, 167 U.S. stock-focused funds managed a total of 23.34 trillion won ($16.24 billion) as of January 21, marking an increase of 1.29 trillion won since the previous year.
This influx of capital into U.S. funds comes amid expectations of a sustained bullish trend in the U.S. economy, with the Trump administration likely to adopt policies that aim to strengthen the largest economy in the world.
Last year, domestic investors experienced solid returns from their U.S. stock investments.
Funds centered on U.S. stocks yielded an impressive average return of 34.1 percent last year.
In 2024, the Standard & Poor's 500 index surged by 23.3 percent, while the tech-driven Nasdaq index soared by 28.6 percent.
Conversely, funds focused on domestic stocks faced outflows of approximately 100 billion won. The Korea Composite Stock Price Index, the nation's benchmark, declined by 3.9 percent year-on-year in 2024, with local stock funds enduring a 0.47 percent dip.
Additionally, South Korea's leading three department store chains reported on Tuesday that their sales of luxury goods continued to rise last year, driven by sustained demand for high-end products despite a sluggish economy.
Luxury sales at Lotte, Shinsegae, and Hyundai department stores experienced a notable increase during the period from 2020 to 2022, characterized by 'revenge spending' as consumers sought to compensate for missed travel and shopping during the COVID-19 pandemic.
The growth rate of luxury sales slowed in 2023 as consumers redirected their spending toward travel and leisure activities. However, the three retailers reported strong sales results in the subsequent year.
Luxury sales at Lotte Department Store, the largest department store in the country by sales, rose by 5 percent in 2024 compared to the previous year.
Shinsegae's and Hyundai's luxury sales increased by 6.2 percent and 11.7 percent, respectively, during the same timeframe.
The companies did not disclose the specific value of their luxury goods sales.
