A new feel for foreign funds

South Korean retail investors' increasing appetite for foreign assets has significant risk management implications for investors. And while a tax exemption for Korea-domiciled funds has boosted domestic asset managers, it has also brought more hedging complications and concerns over portfolio concentrations. By Joe Marsh

Just as institutional investors in South Korea are looking abroad to diversify, boost returns and lengthen the average duration of their portfolios, so retail investors are making similar moves. But individuals tend to have just one objective for doing that: higher returns. Domestic and global asset managers have responded by offering notoriously risk-hungry Korean investors ever-greater numbers of funds with foreign asset exposure to high-risk/high-return markets such as China and Russia, and