Korean fund net assets up 6.2% in Q1

[Photo by MK DB]

The net total of assets for South Korean funds increased by more than 6 percent in the first quarter of 2024 from the end of 2023, data showed on Tuesday.

According to the Korea Financial Investment Association, the total net assets of all funds in the country stood at 1,031.3 trillion won ($761.3 billion) at the end of March, up 59.9 trillion won from December.

By type, the net assets of money market funds (MMFs) rose by 19.3 trillion won, while those of equity and bond funds gained by 11.4 trillion won and 8.2 trillion won, respectively.

MMFs saw a net inflow of 17 trillion won in the first quarter, bringing their total net assets to 204.4 trillion won, up 11.9 trillion won from the fourth-quarter average.

The total net assets of MMFs are compared on a quarterly average basis as MMFs tend to experience a peak in demand at the end of a quarter.

Individual and corporate MMFs saw net asset increases of 900 billion won and 11 trillion won, respectively.

“MMFs are considered to have a low risk of loss compared to other financial investment products and have high liquidity, which has led to a steady expansion in demand from individuals and corporations wanting to deposit surplus funds,” the association said.

Equity funds saw a net inflow of 3.2 trillion won during the same period. Total net assets increased by 11.4 trillion won to 122.2 trillion won from the end of the previous year.

In particular, equity exchange-traded funds (ETFs) saw a net inflow of 4.6 trillion won, with total net assets increasing 9.3 trillion won to 63.5 trillion won.

The increase was attributed to favorable fund performance as Korean and overseas stock markets improved.

For bond funds, there was a net inflow of 7 trillion won in the first quarter, with total net assets gaining 8.2 trillion won to 146.5 trillion won.

Funds investing in Korean bonds saw a net inflow of 6.3 trillion won. Total net assets were up by 7.5 trillion won to 139.4 trillion won from the end of the previous year.

The association credited the increase to investors‘ growing expectations of lower interest rates moving forward.