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Investors park more money in overseas funds in search of high returns

All News 14:23 January 14, 2020

SEOUL, Jan. 14 (Yonhap) -- South Korea's overseas investment funds almost doubled in terms of net asset value to account for nearly 30 percent of the country's investment funds last year, as investors bet on higher yields outside the bearish domestic market, data showed Tuesday.

According to the data by the Korea Financial Investment Association (KOFIA), some 4,670 overseas investment funds under management here came to 183.7 trillion won (US$159.5 billion) as of the end of 2019, taking up 28.3 percent of all investment funds.

Investors park more money in overseas funds in search of high returns - 1

The proportion of overseas investment funds of the total almost doubled over five years, up from 15.3 percent in 2015.

Overseas investment funds refer to those that invest more than 60 percent of their assets in overseas stocks, bonds, derivatives and real estate.

The growth of the overseas investment funds came amid low returns from domestic-focused funds.

To bolster the struggling economy, the Bank of Korea (BOK) slashed the policy rate twice in 2019: from 1.75 percent to 1.50 percent in July and to 1.25 percent in October, matching the all-time low that was previously seen in 2016.

The country's stock market has been suffering a bearish run for years, although the country's benchmark index, the KOSPI, advanced by more than 7 percent last year.


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