Baring Germany Fund Sees Over 10 Billion KRW Inflow Since Beginning of Year

As the German stock market continues to rise, interest in the 'Baring Germany Fund,' which primarily invests in German equities, is also increasing.

On May 23, Baring Asset Management announced that the amount of capital inflow into the Baring Germany Fund has surpassed 10 billion KRW so far this year.

The Baring Germany Fund is the only actively managed fund in Korea that primarily invests in German stocks. It is structured as a feeder fund that invests indirectly in the 'Baring German Offshore Fund,' which has been managed since 1990. The fund employs a strategy of selectively capturing long-term growth opportunities by focusing on structural changes in the German economy and the competitiveness of German companies.

The DAX index on the Frankfurt Stock Exchange has risen by over 20% since the beginning of the year, reaching an all-time high. The strength of the German stock market is not a short-term rebound, but rather stems from structural changes such as the German government's large-scale fiscal expansion, increased defense spending, and the growth of innovative technology companies including artificial intelligence (AI). After U.S. President Donald Trump announced the suspension of military support for Ukraine in March, the German government unveiled a fiscal easing and infrastructure investment plan totaling 1 trillion euros, raising market expectations.

Paul Morgan, manager of the Baring German Offshore Fund, stated, "The German coalition government's infrastructure investments and increased defense spending represent significant policy changes that will have a broad impact across German industry." He added, "These policies will strengthen the growth foundation of the German economy and create an environment in which German companies can achieve stable growth even amid global trade uncertainties."

He emphasized, "German small- and mid-cap companies have a high proportion of domestic sales and can directly benefit from strong economic stimulus measures, giving them significant growth potential."

He also explained, "Recently, large-cap stocks such as SAP, one of Europe's largest listed companies, have led the rise in the German stock market. However, relatively undervalued small- and mid-cap stocks have even greater upside potential."

A representative from Baring Asset Management commented, "As uncertainty in global markets increases, more investors are considering strategic diversification away from U.S.-centric portfolios," and analyzed, "The Baring Germany Fund is the optimal vehicle for concentrated investment in German companies exposed to structural growth themes such as AI, defense, and eco-friendly infrastructure."

The Baring Germany Fund is available through major financial institutions including Mirae Asset Securities, Samsung Securities, Woori Investment & Securities, NH Investment & Securities, Kiwoom Securities, KB Securities, Hana Securities, and Korea Investment & Securities. Investors can choose between a currency-hedged [H] option, which mitigates euro exchange rate risk, and an unhedged [UH] option, which is exposed to exchange rate fluctuations, according to their preference.