More Koreans are opting to trade overseas stocks directly as they look for better investment options amid bearish market conditions at home, but investment in offshore stock funds has waned amid growing concerns about the global economy.

According to Seoul-based market tracker FnGuide on Monday, total assets in 776 funds investing in offshore equities reached 20 trillion won ($16.5 billion) as of August 16, down by 2.34 trillion won from the beginning of the year. Money has continued to flow out from the funds, with their assets down by 344.3 billion won over the past month. The funds that delivered 15.51 percent of return on average earlier in the year recorded a negative yield of 3.39 percent last month.

Investors are pulling their money out even from funds investing in stocks of the United States and Vietnam, which typically showed high demand thanks to relatively handsome returns. Funds investing in North American equities have seen an outflow of 193.2 billion won since the beginning of the year. Assets in Vietnamese equity funds grew 122.4 billion won from early this year, but shrank 22.4 billion won over the past month.

But Korean investors’ direct purchases of overseas individual stocks have been increasing. According to Korea Securities Depository (KSD), the purchase of offshore equities by Korean investors rose from $12.08 billion in 2017 to $17.07 billion in 2018. The figure already amounted to $13.38 billion as of August 16.

Investors have shown high interests in not only individual foreign tech heavyweights but also overseas exchange-traded funds (ETFs), as five out of top 10 foreign equity purchases were ETFs. The U.S. e-commerce giant Amazon ranked top, but it was followed by ETFs tracking the CSI 300 Index whose transactions totaled $587.6 million. Blackrock’s iShares investment-grade bond ETFs ranked fourth and its dollar-denominated emerging market bond ETFs came in sixth.

By Chung Seul-gi and Choi Mira

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