Amid the boom in Korea's stock market, the share of financial investment assets invested domestically among financial products managed through individual savings accounts (ISA) also increased.
According to the Korea Financial Investment Association on the 25th, the size of financial investment products such as stocks, exchange-traded funds (ETF), and funds managed in ISAs stood at 30 trillion won as of the end of Aug. This amounts to 66.4% of total ISA assets under management of 45.2 trillion won.
The share of financial investment products rose from the end of last year. As of the end of last year, financial investment products within ISAs totaled 19.7 trillion won, accounting for 59.0% of total assets under management (33.4 trillion won). The management scale increased by 10.3 trillion won, and the share rose by 7.4 percentage points (p).
By contrast, over the same period, the share of deposits and savings (excluding investor deposits) fell from 41.0% (13.7 trillion won) to 33.6% (15.2 trillion won), with the amount increasing but the proportion decreasing.
In particular, within financial investment products, the share of financial products investing in Korea increased. As of the end of last year, among financial investment products (19.7 trillion won) within ISAs, domestic investment products accounted for 12.8 trillion won, or 65.0%. As of the end of Aug. this year, that grew to 19.8 trillion won, and the share also increased by 1.0 percentage point to 66.0%.
Meanwhile, although overseas investment products increased in size from 6.9 trillion won to 10.2 trillion won over the same period, their share decreased from 35.0% to 34.0%.
By financial investment product, for ETFs, the share of domestic investment ETFs rose by 6.1 percentage points from 21.2% at the end of last year to 27.3% at the end of Aug. this year, while overseas investment ETFs declined from 78.8% to 72.7%.
The share of domestic funds also increased by 2.3 percentage points, from 45.6% at the end of last year to 47.9% at the end of Aug. this year. In contrast, the share of overseas funds declined from 54.4% to 52.1%.
Domestic stocks increased from 6.1 trillion won at the end of last year to 9.4 trillion won at the end of Aug. this year, up about 3.3 trillion won, with their share within financial investment products rising by 0.7 percentage point from 30.7% to 31.4%.
The association analyzed, "As more investment funds have flowed into Korea's stock market recently and stock indexes hit record highs, preference has grown for financial investment products focused on Korea, increasing demand to switch from overseas investment assets to domestic investment assets."
Lee Hwan-tae, head of the industry and market division at the association, said, "If long-term investment incentives such as tax benefits and an expanded enrollment age increase, capital inflows into the domestic capital market could accelerate, expanding productive finance."