South Korea’s exchange-traded funds have sucked in money from investors who are looking for safe investment vehicles that come with decent returns amid increased volatility, data showed on Friday.
According to the Korea Financial Investment Association, the net asset value of local ETFs reached 20.41 trillion won ($18.78 billion) on Wednesday, the highest on record. The figure topped the 20-trillion won mark on Dec. 23 for the first time, the data showed.
An ETF refers to an investment fund traded on stock exchanges and represents a basket of stocks that reflects an index, or commodities and bonds. It provides retail investors and institutions with a more liquid and risk-hedging tool.
Since being launched in 2002, South Korea’s ETF market has drawn investors who want safer investment destinations.
Last year, ETFs tracking foreign stock indices drew keen attention from retail investors.
The data compiled by the Korea Exchange, the bourse operator, showed that the net asset value of local ETFs shed 1.5 percent, or 279 billion won, last year on a slump in the local stock market, with their average return being minus 6.3 percent.
In contrast, ETFs tracking foreign stock indices and commodities saw their net asset value almost double last year, and delivered returns of 36.2 percent on average, the data showed. (Yonhap)
