[2025 Asia Fund Awards] Chairman Seo Yuseok "Striving to Establish a Long-term Investment Culture"

Congratulatory Remarks by Seo Yuseok, Chairman of the Korea Financial Investment Association

Hello! I am Seo Yoo-seok, Chairman of the Korea Financial Investment Association. I sincerely congratulate the hosting of the 16th Asia Fund Awards.

Over the years, the Asia Fund Awards have highlighted the value of long-term investment and promoted healthy market competition, thereby elevating the level of the Korean fund market to a new stage.

I would also like to express my deep gratitude to CEO Woo Byung-hyun of Asia Economy for organizing this meaningful event every year, Chairman Lee Jun-seo of the Korean Securities Association for serving as the head of the judging panel, and all the staff who have worked tirelessly to prepare for this event.

Above all, I extend my congratulations and appreciation to all the award recipients who have worked hard over the past year for the development of the Korean fund market.

Seo Yu-seok, Chairman of the Korea Financial Investment Association, is delivering a congratulatory speech at the '2024 Asia Capital Investment Awards Ceremony' held on the 5th at Lotte Hotel in Jung-gu, Seoul. Photo by Kang Jin-hyung

In 2024, despite a challenging environment, our capital market saw an inflow of 127 trillion KRW centered on bond and equity funds, pushing the domestic fund market’s net assets beyond 1,100 trillion KRW. Public funds, led by ETFs, recorded the highest growth rate of 25% in the past five years, reaffirming the growth potential of our fund market.

However, this year as well, our capital market faces intensified capital outflows overseas due to declining market competitiveness amid intertwined domestic and international uncertainties.

To break this vicious cycle and establish a virtuous cycle structure that increases citizens’ retirement assets in an aging society and enhances the value of the capital market, expanding the demand base for long-term investment is essential.

Our financial investment industry will strive as follows to revitalize the fund market and establish a culture of long-term investment using pension assets.

First, we are promoting the direct listing of public funds, targeting the second quarter of this year. We are confident this will be a starting point for the paradigm shift in fund investment from a distributor-centered market to an investor-centered direct market, and the asset management industry will unite and prepare accordingly for this change.

Second, rationalization of the fund taxation system is necessary to encourage long-term fund investment. We will continuously propose tax support measures for funds to the government, including offsetting gains and losses between funds and improving tax imbalances between domestic and offshore funds.

Additionally, we will actively propose the introduction of separate taxation on dividend income for domestic stocks and equity funds exclusively for general investors. This will serve as an opportunity to bring back Korean investors abroad, known as Seohak Gaemi, to the domestic stock market.

Third, the retirement pension market, where over 80% of accumulated amounts are concentrated in low-yield principal-guaranteed products, must be transformed into a market centered on long-term stable return products. To this end, the asset management industry launched a mid-risk, mid-return asset allocation long-term fund called the “Didim Fund” as a joint industry brand last September. It is performing well, with an average return of 7.8% among the top 10 funds and net inflows exceeding 100 billion KRW. Going forward, the Didim Fund is expected to establish itself as a mainstream product in the pension market alongside TDFs.

Fourth, the default option system for retirement pensions needs improvement. Currently, over 80% of default option subscribers and about 90% of default option accumulated amounts are concentrated in ultra-low-risk products such as deposit-type products, failing to fulfill the system’s purpose of securing workers’ retirement stability.

A bold institutional reform is needed to improve returns, and the association will continuously propose various ideas together with the industry. As the investment landscape rapidly changes, our financial investment industry will actively participate in the flow of change based on innovative thinking.

With the wisdom of “Jultakdongsi” (simultaneous effort from inside and outside), if the association and the industry cooperate closely, the current crisis will become a turning point for a new leap forward.

Once again, I sincerely congratulate all the award recipients and wish you even more brilliant development and success on your future journey. Thank you.