The South Korean fund market enjoyed an inflow of more than 1 trillion won (US$878.35 million), mostly into bond-type funds, in March.
The net asset value of local investment funds came to 584.78 trillion won (US$510.13 billion) as of the end of March, up 0.2 percent from 1.11 trillion won (US$978.48 million) at the previous month, according to the data from the Korea Financial Investment Association (KOFIA) on April 10.
By type of product, there was a net outflow of 6.05 trillion won (US$5.31 billion) from money market funds (MMFs), which allow investors to deposit and withdraw money at any time. Nearly 2.11 trillion won (US$1.85 billion) of money drained from domestic equity-type funds, while 2 trillion won (US$1.76 billion) of money came in domestic bond-type funds.
The net asset value of total investment funds came to 584.69 trillion won (US$513.56 billion), up
1.78 trillion won (US$1.56 billion), or 0.3 percent, from the end of February. The net asset value of equity-type funds at home and abroad fell by 2.19 trillion won (US$1.93 billion) just in a month to 84.58 trillion won (US$74.29 billion). The figure of bond-type funds at home and abroad recorded at 110.98 trillion won (US$97.48 billion).
An official from the KOFIA said, “The KOSPI showed a sharp drop in March as the news broke that U.S. President Donald Trump and North Korean leader Kim Jong-un had failed to reach a deal and the OECDcut the growth outlook for South Korea’s economy and there was growing concerns over the global economic slowdown. There was a net flow of funds from equity-type funds due to the drop in stock prices and the estimated value decreased, shrinking the net asset value of equity-type funds. The quarterly fund demand of companies drained over 6 trillion won (US$5.27 billion) of money out from MMFs. In contrast, more money was invested in bond-type and tangible asset-type funds because of a stronger preference for risk free assets.”