Bond funds favour longer debt as S Korea's demographics hit growth

Seoul

BOND funds are favouring longer debt in South Korea after the central bank said this month that an ageing population can't sustain the levels of economic growth enjoyed a decade ago.

Mirae Asset Global Investments Co and Western Asset Management Co say the 10-year yield is attractive even as it nears the official bank rate. RBC Capital Markets calls South Korea its favourite East Asian investment destination as the nation mirrors Japan's demographic fate. The potential growth rate of Asia's fourth-largest economy has declined as the population grays, the Bank of Korea (BOK) said on Jan 6.