Increased Volatility in Stock Market Pushes Q3 Fund Net Assets Beyond 800 Trillion Won

3rd Quarter 16.1 Trillion KRW Net Capital Inflow
Shift to Net Inflow in Equity Funds as Indirect Investment Increases

[Asia Economy Reporter Minji Lee] Despite volatile market conditions and interest rate hikes in the third quarter of this year, domestic fund net assets exceeded 800 trillion KRW.

According to the '2021 Q3 Fund Market Trends' released by the Korea Financial Investment Association on the 15th, as of the end of September, the total net assets of domestic funds were recorded at 810.1 trillion KRW, an increase of 16.7 trillion KRW (2.1%) compared to the end of the second quarter.

Regarding fund inflows and outflows, the entire fund market saw a net inflow of 16.1 trillion KRW during the third quarter. This was because bond-type and short-term financial funds, which had attracted significant capital by the end of the first half, experienced net outflows, while other types saw inflows. Public offering fund net assets decreased by 1.1 trillion KRW (-0.3%) to 312.1 trillion KRW compared to the previous quarter, whereas private equity funds increased by 17.8 trillion KRW (3.7%) to 495.3 trillion KRW. As of the end of last month, the total fund subscription amount was 771.6 trillion KRW, up 17.8 trillion KRW (2.4%) from the end of the second quarter.

Within public offering funds, net assets declined in bond-type funds (-6.5%), while private equity funds saw notable increases in mixed asset (10.4%) and mixed bond-type (84%) funds.

By type, equity funds saw prominent capital inflows as the stock market showed mixed trends, but the total net assets decreased slightly by 30 billion KRW (0.3%) to 99.8 trillion KRW compared to the end of the previous quarter. Domestic equity funds recorded net assets of 64.6 trillion KRW, down 1.2 trillion KRW (-1.8%) from the previous quarter due to volatile market conditions, but capital flow turned to net inflow in the third quarter. Specifically, 315 billion KRW flowed in July, 1.861 trillion KRW in August, and 247 billion KRW in September. A Korea Financial Investment Association official stated, “As the market showed mixed trends due to economic peak-out and big tech regulations, making it difficult to generate profits through individual stock investments, capital appears to have shifted to indirect investments.”

In the case of bond-type funds, capital outflows occurred due to factors such as interest rate hikes, and total net assets decreased by 1.5 trillion KRW (-1.1%) to 131.3 trillion KRW compared to the previous quarter. Domestic bond-type funds experienced outflows, with net assets closing at 123.3 trillion KRW, down 1.5 trillion KRW (-1.2%) from the previous quarter. Despite the U.S. Federal Reserve's tapering remarks, overseas bond-type funds recorded a slight increase in total net assets by 23.4 billion KRW (0.3%) to 8 trillion KRW.

This content was produced with the assistance of AI translation services.