Moon's 'New Deal' Fund: Will It See the Light of Day?

President Moon Jae-in's tenure shows 'negative' returns until now
Recent one-month return improvement, positive outlook for the second half of the year

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Junho] With about a month left in President Moon Jae-in's term, the returns on the 'New Deal Fund' have yet to break through the negative barrier.

According to the financial investment industry on the 6th, the returns as of that day for the Samsung New Deal Korea Fund (4.15%), KB Korea New Deal (-6.22%), Shinhan Beautiful SRI Green New Deal 1 (-13.88%), Mirae Asset TIGER BBIG K-New Deal Exchange Traded Fund (ETF, 27.79%), and HANARO Fn K-New Deal Digital Plus ETF (-25.93%)?which President Moon subscribed to last January?showed negative returns for all except Samsung New Deal Korea. President Moon invested 10 million KRW in each fund, and it is estimated that the average loss stands at 12.32%. This is even lower than the KOSPI return of -10.58% since January 15.

Since the stocks and weightings held by each fund differ, it is difficult to pinpoint a specific reason. However, looking at the 'K-New Deal Index,' which is composed of BBIG (Bio -42.23%, Secondary Battery -14.46%, Internet -18.12%, Game -13.49%) stocks expected to benefit from the government's New Deal policy, most have recorded significant losses, which explains the reason for the losses.

However, given that the average return of these funds over the past month has shown an improvement of 3.65%, there is a forecast that attention should be paid to the market conditions in the second half of this year regardless of policy changes following the regime change. Choi Kyung-chul, a manager at Samsung Asset Management, said, "The value of industries showing structural growth will be re-evaluated starting in the second half." Kim Hyung-kwan, a manager at Shinhan Asset Management, explained, "Investment centered on semiconductors is expected to expand due to the global supply chain restructuring," adding, "We anticipate a renewed focus on stocks related to electric vehicle supply chains and renewable energy."