South Korea’s government wants to energise the local high-yield market, but its offering hasn’t seduced fund managers and distributors, AsianInvestor.net reports.
South Korea’s Financial Supervisory Service is trying to jump-start the nation’s high-yield debt markets by expanding tax breaks on funds that invest in them – but distributors and fund managers don’t want anything to do with the asset class.
“Distributors are allergic to the words ‘high yield’,” said Hwang Sung-ho, president at PCA Asset Management in Seoul.
Memories of the Asian financial crisis of 1997-98 weigh heavy on the minds (and wallets) of would-be investors, AsianInvestor.net said. “This industry was badly burned,” notes Lee Kuenmo, vice chairman at MiraeAsset Securities.
As a result, both distributors and fund managers concentrate on developing their equities and overseas investments. “Fixed income is not a focus for us,” said Yoon Dong-sup, general manager of product development at Korea Investment & Securities.
So there are still some places yield-happy investors won’t go – although Jamaica isn’t one of them.