January Fund Net Assets 681 Trillion KRW... Inflows into Safe Assets Such as Bond and Real Estate Funds

[Asia Economy Reporter Oh Ju-yeon] Although risk asset preference seemed to increase early in the year due to news such as the signing of the US-China trade agreement, fear spread following the rise in confirmed cases of the novel coronavirus infection (COVID-19), resulting in outflows from equity funds in January, while funds flowed into bond and real estate funds. With the resolution of year-end funding demand, money market funds (MMFs), which are standby funds, also saw inflows, leading to an increase in total fund net assets compared to the previous month.

According to the Korea Financial Investment Association on the 14th, total fund net assets in January recorded 681.1 trillion won, an increase of 22.3 trillion won compared to the end of the previous month, due to increases in MMF, bond-type, and real estate fund assets under management.

Equity funds saw net outflows and a decrease in valuation, resulting in net assets decreasing by 4.3 trillion won compared to the end of the previous month to 84.6 trillion won. Domestic equity funds experienced net outflows of 600 billion won, with net assets decreasing by 3.8 trillion won to 63.5 trillion won. Overseas equity funds saw 300 billion won withdrawn, with net assets decreasing by 400 billion won compared to the end of the previous month to 21 trillion won.

Due to increased preference for safe assets, net assets of bond and real estate funds increased.

Bond funds saw increased preference amid concerns over Iran-US conflict and the spread of COVID-19, with total bond fund net assets rising by 1.4 trillion won compared to the end of the previous month to 120.5 trillion won. Domestic bond funds had net inflows of 400 billion won, with net assets reaching 110.8 trillion won, while overseas bond funds saw 100 billion won withdrawn but net assets still increased to 9.6 trillion won. Additionally, the trend of increasing net assets in real estate funds continued, with net inflows of 1.6 trillion won and net assets rising by 2.2 trillion won compared to the end of the previous month to 103 trillion won.

MMFs saw net inflows of 23.5 trillion won, with net assets increasing by 23.7 trillion won compared to the end of the previous month to 129.2 trillion won.

Meanwhile, net assets of derivative product funds decreased by 1.8 trillion won to 49.4 trillion won, and mixed asset funds also decreased by 200 billion won to 38.4 trillion won.