Net asset of Korea's overseas funds hits record high

Net asset of Korea's overseas funds hits record high

The net asset of South Korea’s overseas investment funds last week hit a record high of 88.2 trillion won ($75.4 billion) in nearly nine years, government data showed Wednesday.

It marked the highest since Dec. 6, 2007, when the corresponding figure came to 87.8 trillion won, according to data compiled by the Korea Financial Investment Association.

Real estate-based funds accounted for 24 percent of the total overseas investment funds, followed by equity funds with 17 percent, fund of funds with 16 percent and bond and derivatives with 13 percent, according to the association.

Property-based funds have performed well in recent years due to strong demand for houses and property amid low interest rates, said Moon Soo-hyun, an analyst at NH Investment & Securities.

Still, Moon expressed concerns about asset-based funds, citing a possible rate hike.

“A rate hike in lenders could deal a heavy blow to real estate-based funds,” the analyst said.

The US Federal Reserve is widely expected to raise its interest rates next month. Analysts said the Bank of Korea could be put under pressure to raise the rate if the Fed does so, though BOK Gov. Lee Ju-yeol has said a US rate hike does not necessarily mean the central bank will immediately raise its interest rates.

The country’s key rate stands at an all-time low of 1.25 percent.


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