Investors’ Money Keeps Flowing into Funds
As investors’ money keeps flowing into real estate funds and special asset funds, the domestic fund market is setting new records.
The Korea Financial Investment Association (KOFIA) announced on Jan. 13 that the contract amount of South Korean funds, except for private equity funds, came to 579.1 trillion won (US$518.91 billion) as of Jan. 10. The figure went up by 63.58 trillion won (US$56.98 billion) from 515.52 trillion won (US$461.93 billion) on Jan. 10 in 2018.
The contract amount of funds hit a record high for three days in a row from Jan. 8 when it totaled 575.36 trillion won (US$515.56 billion), breaking the previous record of 572.78 trillion won (US$513.25 billion) set on Aug. 8 last year.
By type of fund, the contract amount of stock funds stood at 86.6 trillion won (US$77.60 billion), bond funds 102.09 trillion won (US$91.48 billion), real estate funds 75.55 trillion won (US$67.69 billion), special asset funds 71.3 trillion won (US$63.89 billion) and multi-asset funds 23.69 trillion won (US$21.22 billion).
The contract amount of funds is reaching a record high because the amount of alternative investments flowing into special assets, which have relatively high returns and are stable, such as real estates, social overhead capital (SOC) and vessels, is growing due to factors including volatility on the stock market.
In fact, the contract amount of stock funds and bond funds over the past year increased by only 7.73 trillion won (US$6.92 billion) and 6.95 trillion won (US$6.23 billion), respectively, while that of real estate funds rose by 15.66 trillion won (US$14.03 billion, special asset funds 12.76 trillion won (US$11.43 billion) and multi-asset funds 11.42 trillion won (US$10.24 billion).