Strong Demand for Overseas Investment Funds
The number of overseas investment funds stood at 4,660 as of the end of last month, accounting for 30.3 percent of all funds selling in Korea, the Korea Financial Investment Association said on Nov. 28.
This is the first time that the proportion of foreign investment funds exceeded 30 percent of the Korean fund market. Overseas investment funds are funds in which asset managers collect funds from Korean investors and invest more than 60 percent of assets under their management in overseas stocks, bonds, derivatives and real estate.
As low interest rates have continued for a long time and Korean stocks have shown a slump, overseas investment funds have been on the rise as more investors have turned their eyes to overseas markets for high yields.
The proportion of overseas investment funds steadily swelled from 19.4 percent at the end of 2015 to 20.1 percent in 2016, 23.9 percent in 2017, and 28.0 percent in 2018, and finally topped 30 percent this year.
This year, the total number of funds has increased by 1,001 by the end of last month, of which 640 were overseas investment funds. This reflects that there is strong demand for overseas investment funds.
As of the end of October, the balance of overseas investment funds amounted to 174,869.6 billion won, which was 27.0 percent of the balance of all investment funds put together.
Of the 4,660 overseas investment funds, the number of private equity funds stood at 3,320 (71.2 percent) and that of public offering funds at 1,340 (28.8 percent).
The amount of private equity funds set by fund management firms reached 136,396.3 billion won, accounting for 78 percent while that of public offering funds 38,473.4 billion won (22.0 percent)
type, the number of the derivative type stood at 946, the highest number, followed by 875of the fund of fund type, 716 of the real estate type, 705 of the special asset type, 511 of the stock type, 278 of the bond type, 41 of the hybrid stock type and 36 of the hybrid bond type.