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Investment funds grew fast in 2019 as money parked

Jan 14,2020
The value of investment funds in Korea increased 21 percent last year as investors parked more money in safer financial vehicles amid increased economic uncertainties and a mini rally in the market, data showed Monday.

The net asset value (NAV) of stocks, bonds and real estate-related funds reached a combined 658.8 trillion won ($570.3 billion) at the end of 2019, compared with the previous year’s 544.3 trillion won, according to data from the Korea Financial Investment Association (Kofia).

The rise in NAV was driven by cash inflows into bond funds and money market funds (MMFs) and a rally in the local stock market.

The net asset value of funds that invest in bonds increased 15.9 trillion won, or 15.4 percent, on-year to 119 trillion won, and that of stock funds increased 8.9 trillion won, or 11.2 percent, to 88.8 trillion won in 2019, as a rally late last year boosted overall value, despite a net cash outflow of 6.6 trillion won.

The benchmark Kospi advanced 7.67 percent last year to close at 2,197.67 in the final trading session, buoyed by rising optimism for the China-U.S. trade negotiations and a much-coveted economic recovery.

The net asset value of MMFs rose 15.3 trillion won, or 17 percent, to 105.6 trillion won in 2019, according to the Kofia.

Real estate funds saw their NAV rise 45.9 trillion won, or 31.2 percent, to 193.3 trillion won over the cited period on the back of a cash inflow of 45.6 trillion won, the data showed.