Due to Growing Anxiety about Local Stock Market
South Korean money market funds (MMFs) attracted more than 20 trillion won (US$17.60 billion) this year.
The amount of capital that flew into the MMFs totaled 23.98 trillion won (US$21.10 billion) from Jan. 1 to March 13 this year, according to the Korea Financial Investment Association (KOFIA) on March 17. The amount of MMFs set up increased a whopping 26.7 percent in two months to 113.07 trillion won (US$99.62 billion) from 89.63 trillion won (US$78.97 billion) at the end of last year.
This is because stock investors’ confidence have weakened, with the benchmark KOSPI index going at a snail's pace after rising for a while earlier this year, and demands for short-term investment vehicles have increased
A MMF is an investment vehicle for investors who need to cash out at their pleasure and have not found where to put money into in a short term. Generally, the size of MMFs increases when there is uncertainty in the financial market and investors’ uneasiness grows.
For the same reason, money flew out of the domestic equity-type funds and equity-oriented balanced funds this year. There has been a net outflow of 368.50 billion won (US$324.67 million) of money from the domestic equity-type funds and 116.60 billion won (US$102.73 million) from the equity-oriented balanced funds since the beginning of the year, according to financial market tracker FnGuide. In particular, equity-type funds saw 429.90 billion won (US$378.77 million) worth of money flow out over the past month as the KOSPI has been slowed.