South Korean stock funds expanded for eight straight months as of late January, bolstered by the recent bourse rally, financial data showed Friday.
According to the Korea Financial Investment Association (KOFIA), the contract amount controlled by stock funds stood at 81.6 trillion won (US$75.6 billion), the highest tallied since 81.9 trillion won reached in late March 2016.
The 22-month high comes after the size of local stock funds soared to 100.3 trillion won in end-February of 2012 and generally started to lose ground in the following years, hitting an all-time low of 68.4 trillion won in late May 2017.
KOFIA said that more money has been coming into such funds as the Korea Composite Stock Price Index (KOSPI), the country's main stock market, started to pull off solid growth in the middle of last year, culminating in the market surpassing the 2,600 mark for the first time ever last month.
Market watchers said that with the KOSPI experiencing some correction this month amid concerns of sharper U.S. rate hikes, all eyes will be on the effects it will have on domestic mutual funds.
"Although the size of local stock funds have been growing over the past several months, this may not be the case for February," an observer said.
The latest data, meanwhile, showed that as the size of stock funds have been growing, bond funds have been on a steady decline.
Bond funds hit a peak of 110.9 trillion won in September 2016 but stood at 94.5 trillion won as of late January. (Yonhap)
Kim Sua firstname.lastname@example.org
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