Korean Funds Struggle as Tensions Build

With geopolitical tensions between communist North Korea and emerging South Korea now searing, the once trendy practice of turning to emerging-market Korean funds is long gone.

"The ongoing nuclear-related crisis is starting to take its toll on foreign investors," said Bill Rocco, senior analyst at Morningstar, commenting on the pending liquidation of Alliance Capital’s Korean Investment Fund, which is down 31.3% in the last year.

"The big fad of investing in emerging markets was rudely interrupted by the Asian debt crisis. Add to that a three-year bear market. We’re still in the hangover period," said Gary Gensler, former undersecretary of the U.S. Treasury.

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Money Management Executive
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