about 4 years ago • 2 mins
A Korean fund backing Oscar-winning movie Parasite hit the jackpot this week – illustrating investors' increasing invention in the hunt for market-beating returns 🔍
The private hedge fund, run by Seoul’s Ryukyung PSG, contributed $500,000 towards the $11 million cost of making and distributing the surprise Best Picture winner. And with Parasite’s box office take $165 million and counting, Ryukyung's fund stands to improve further on the 72% profit it’s made since launching in mid-2018.
Shares of Parasite production company Barunson Entertainment & Arts***,* meanwhile, rose 90% this week, and noodle maker Nongshim** – whose products feature prominently in the movie – saw its stock slurp up 11%. Film investment is nothing new, but investor betting on even tangentially related companies demonstrates just how desperate some are for returns in a world of falling interest rates 😅
It’s not just films: profit-hunting investment managers are increasingly turning to big data and machine learning in a bid to hang on to backers attracted by simple passive investment. According to Standard & Poor’s, however, just 12% of US stock funds have beaten their benchmark over the past decade.
The chief investment officer at investment bank Morgan Stanley this week said stock market rises remained dependent on low interest rates, rather than increasing earnings – and that investors’ preference for big “defensive” companies over smaller “cyclical” stocks exposed to economic growth was unlikely to change anytime soon.
A survey of big investment managers from Boston Consulting Group on Wednesday, meanwhile, showed ongoing concern that companies’ “price-to-earnings” ratios remain high – and that US stocks’ longest run without a “bear market” could soon change 🐻
But despite investors' expectations for stock market returns this year hitting a record low of 5.6%, maintaining a balanced, market-tracking portfolio remains probably the best approach for the average investor. Movie investment, after all, is risky business – and, as this year’s Oscars showed, picking the next big thing is no mean feat.
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