Fund Growth Also "Stalls" Amid the '3 Highs'

[Asia Economy Reporter Junho Hwang] Due to the global rise in inflation and consecutive interest rate hikes in major countries, the growth of the fund market is also slowing down.

According to the "Fund Market Trends for Q3 of this Year" announced by the Korea Financial Investment Association on the 19th, as of the end of September, the total net assets of all funds amounted to 842.2 trillion KRW, and the total subscription amount was 824.4 trillion KRW, increasing by 1.6 trillion KRW (+0.2%) and 3.2 trillion KRW (+0.4%) respectively compared to the previous quarter.

However, net assets in July and last month slightly decreased to 862.6 trillion KRW and 861.7 trillion KRW respectively. The subscription amount also showed a decreasing trend from 836.7 trillion KRW and 835.7 trillion KRW.

The net assets of public funds decreased by 16.1 trillion KRW (-5.5%) to 275.4 trillion KRW compared to the previous quarter. On the other hand, private equity funds increased by 17.8 trillion KRW (+3.2%) to 566.8 trillion KRW.

There was an outflow of funds in MMF, bond-type, and mixed bond-type funds, but inflows were seen in alternative investment funds. As a result, the total fund market saw a net inflow of 570 billion KRW (excluding ETFs).

With increased stock market volatility and the rising attractiveness of fixed interest rate products during the interest rate hike period, the net assets of securities-type funds decreased. Additionally, there was an outflow of funds from major financial investment products.

By type, equity funds recorded a total net asset of 91.1 trillion KRW, down 3.7 trillion KRW (-3.9%) from the previous quarter due to concerns over a global economic downturn.

Bond funds saw their total net assets decrease by 2 trillion KRW (-1.6%) to 121.3 trillion KRW as global monetary tightening and accelerated interest rate hikes continued.

Short-term financial products experienced the largest outflow of funds (-4.5 trillion KRW) compared to other fund types during the quarter due to the impact of rising base interest rates, resulting in a decrease of 3.5 trillion KRW (-2.4%) in total net assets compared to the previous quarter.

For real estate and special asset funds, as global stock market volatility increased, funds flowed into alternative investment funds, with total net assets reaching 153.8 trillion KRW (5.0%) and 134.3 trillion KRW (4.7%) respectively.

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