KOFIA: Proportion of Domestic Financial Investment Products in ISAs Rises

The proportion of financial investment assets managed through Individual Savings Accounts (ISA) that are invested domestically has increased.

According to the Korea Financial Investment Association on September 25, the total value of financial investment products such as stocks, Exchange Traded Funds (ETFs), and funds managed within ISAs reached 30 trillion won as of the end of last month. This accounts for 66.4% of the total ISA assets under management, which stand at 45.2 trillion won.

Compared to the end of last year, when the value of financial investment products within ISAs was 19.7 trillion won, this represents an increase of over 10 trillion won. In terms of proportion, this marks a rise of 7.4 percentage points.

During the same period, deposits and installment savings (excluding investor deposits) increased from 13.7 trillion won to 15.2 trillion won. However, their share of total assets under management fell from 41.0% to 33.6%.

Within financial investment products, the share of those investing domestically also rose. At the end of 2024, domestic investment products within ISAs amounted to 12.8 trillion won, accounting for 65.0%. By the end of August, this had increased to 19.8 trillion won, with the proportion rising by 1.0 percentage point to 66.0%. The share of overseas investment products fell from 35.0% to 34.0%, although the amount increased from 6.9 trillion won to 10.2 trillion won.

Looking at major financial investment products, the proportion of domestic ETFs rose from 21.2% at the end of 2024 to 27.3% at the end of last month, a 6.1 percentage point increase. In contrast, overseas ETFs decreased from 78.8% to 72.7%.

The share of domestic funds also increased from 45.6% to 47.9%, up 2.3 percentage points. Overseas funds dropped from 54.4% to 52.1%.

An ISA is an account-type product that allows investors to invest in a variety of financial products-including domestically listed stocks, ETFs, funds, Real Estate Investment Trusts (REITs), and deposits or installment savings-within a single account while also receiving tax benefits. It was launched in March 2016 to support wealth accumulation for the public through comprehensive asset management.

Lee Hwantae, Head of the Industry and Market Division at the Korea Financial Investment Association, stated, "The demand for asset management through ISAs among the Korean public is gradually increasing. If long-term investment incentives such as tax benefits and expanded eligibility by age continue to grow, capital inflows into the domestic capital market will accelerate, thereby expanding productive finance."

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