Fund investment in Korea reached a new milestone with outstanding net assets hitting 605.5 trillion won in April as capital chased safer debt and short-term investment.

According to the data released by the Korea Financial Investment Association (KOFIA) on Monday, the total net asset value of local funds gained 2.9 percent or 16.9 trillion won from the previous month to 605.6 trillion won.

By type, the net asset value of money market funds (MMFs) rose 9 percent from the previous month to 108.9 trillion won in April, driven by the money inflow from businesses that tend to increase their investment in the beginning of a quarter. The net asset value of bond funds gained 2.8 percent or 3.1 trillion won to 111 trillion won, with funds investing in domestic bonds up 3 percent to 106.1 trillion won and overseas bonds 0.1 percent to 8 trillion won.

The net asset value of real estate funds grew 3.3 percent and special asset funds 2.8 percent. The net asset value of mixed asset funds increased 8.8 percent, fund of funds 6.3 percent and derivative products funds 2.1 percent.

The net asset value of equity funds, on the other hand, shrank 1.2 percent to 83.6 trillion won over the same period. The drop was blamed on the rising uncertainties in the stock market due to the mounting conflicts between the United States and China on failure to reach an agreement last week. The equity fund market showed money outflow for three months in a row.

The net asset value of funds investing in local stocks decreased 2.2 percent to 61.2 trillion won, while that of funds investing in foreign shares went up 1.8 percent to 22.3 trillion won.

By Yoo Joon-ho and Choi Mira

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