According to the Korea Financial Investment Association (KOFIA) on Friday, public funds jumped 47.3 percent from the end of last year to 897.4 trillion won (US$646 billion), while private funds grew 9.2 percent to 837.1 trillion won. As a result, public funds accounted for 51.7 percent of the overall fund market, up from 44.3 percent six months earlier, overtaking private funds for the first time.
The broader fund market also expanded rapidly. Total assets under management in domestic public and private funds reached 1,735 trillion won ($1.25 trillion) at the end of June, up 26 percent from the end of last year. The increase more than doubled the 11.4 percent growth recorded in the previous six months.
The turnaround was driven largely by ETFs, which are publicly traded investment funds that track stocks, bonds or other assets and can be bought and sold like shares. ETF assets surged 72.4 percent to 512.4 trillion won during the six-month period, far outpacing the 23.3 percent growth recorded by public funds excluding ETFs.
ETFs accounted for 57.1 percent of public fund assets at the end of June, up from 48.8 percent six months earlier. Equity ETFs led the expansion, with assets more than doubling to 326.3 trillion won, while derivative ETFs increased 52.4 percent to 104.8 trillion won.
The ETF boom also reinforced investors' preference for domestic assets. Assets invested in South Korea rose 30.4 percent to 1,137 trillion won at the end of June, lifting their share of total fund assets to 65.6 percent from 63.4 percent six months earlier. South Korean equity funds more than doubled to 282.9 trillion won, rising 125.2 percent. Overseas investment funds also expanded, though at a slower pace, growing 18.5 percent to 597.1 trillion won.
The trend was equally evident in fresh money entering the market. Net inflows totaled 126.3 trillion won during the first half, including 96.9 trillion won into public funds and 29.3 trillion won into private funds.
Equity funds attracted the largest inflows at 50.9 trillion won, followed by money market funds (MMFs) with 28.4 trillion won, derivative funds with 12.2 trillion won and balanced funds with 10.6 trillion won. Bond funds were the only category to post net outflows, with about 3 trillion won leaving the sector.
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