54 Trillion Won Net Inflow into Public Offering Funds Amid ETF Surge... 20% Increase YoY

ETF Total Net Assets of 121 Trillion Won

Last year, the public offering fund market grew by nearly 20% compared to the previous year, driven by the popularity of exchange-traded funds (ETFs). This marks the largest increase in the past decade.

According to the Financial Supervisory Service on the 2nd, the assets under management (fund trust assets and discretionary investment contract amounts) of asset management companies at the end of 2023 amounted to KRW 1,482.6 trillion, an increase of KRW 84.7 trillion (6.1%) compared to the end of 2022 (KRW 1,397.09 trillion).

The total fund trust assets reached KRW 924.8 trillion, up KRW 93.7 trillion (11.3%) from the end of 2022. The discretionary investment contract amount was KRW 557.8 trillion, a decrease of KRW 9 trillion (1.6%).

Public offering funds increased by KRW 53.7 trillion (19.5%), recording the largest growth in the past 10 years. The year-on-year growth rates for public offering funds were 8.3% in 2015, 3.8% in 2017, 8.9% in 2019, and 11.3% in 2021. This was influenced by the net asset value of ETFs swelling significantly to KRW 121.1 trillion at the end of 2023 from KRW 78.5 trillion the previous year.

Regarding profit and loss, the net income of asset management companies in 2023 was KRW 1.6023 trillion, a decrease of KRW 1.249 trillion (43.8%) compared to 2022 (KRW 2.8513 trillion), which is attributed to a base effect. In 2022, about KRW 2.3 trillion in gains from the disposal of Kakao Bank shares by Korea Investment Value was reflected.

During the same period, operating profit was KRW 1.5111 trillion, an increase of KRW 326.1 billion (27.5%) compared to the previous year (KRW 1.185 trillion). This was due to operating revenue increasing by KRW 243.4 billion and operating expenses decreasing by KRW 82.7 billion.

By company, out of a total of 468 firms, 289 recorded profits while 179 posted losses. The proportion of loss-making companies decreased by 12.1 percentage points to 38.2% in 2023 from 50.3% in 2022. Among general private equity firms, 166 out of 387 companies were in the red, marking a 14.4 percentage point decrease in the loss ratio to 42.9% compared to the previous year. In this regard, the Financial Supervisory Service evaluated that "as diversity improved, the operating performance of asset management companies also improved."

The number of companies stood at 468 at the end of 2023, an increase of 31 from 437 at the end of 2022. The number of public offering asset management companies remained the same at 81, while general private equity firms increased to 387. The total number of employees was 13,053, up 393 (3.1%) from 12,660 at the end of 2022.

The Financial Supervisory Service stated, "We will support the continuous development of the asset management industry," adding, "We plan to continuously monitor the financial and profit and loss status of each asset management company in preparation for interest rate fluctuations, international situations, and financial market volatility in the future."

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