South Korea’s benchmark KOSPI index ended the day above 3,180, posting gains, while the KOSDAQ also finished higher. (Image courtesy of Yonhap)
SEOUL, Sept. 5 (Korea Bizwire) — With South Korea’s stock market stuck in a holding pattern, investors are pouring money into bond-focused exchange-traded funds, underscoring a shift toward safer assets amid global economic uncertainty.
According to Koscom data released Thursday, Samsung Asset Management’s KODEX Money Market Active and Korea Investment Trust’s ACE Money Market Active ranked first and second in net inflows over the past week, attracting 211.3 billion won ($153 million) and 157.7 billion won, respectively. Both funds mirror money market vehicles by investing in short-term bonds and commercial paper.
Other bond ETFs also drew heavy inflows, including KB Asset Management’s RISE Short-Term Special Bank Bond Active (50.3 billion won) and Mirae Asset’s TIGER CD Rate Plus Active (42.4 billion won). Woori Asset’s WON Short-Term Bond Plus Active followed with 41.3 billion won.
Often dubbed “parking” products, such funds provide a temporary safe haven when equity markets are volatile. “Expectations of a U.S. rate cut in September, coupled with slowing economies in France and Germany, have lifted demand for safe assets,” said Nam Yong-su, head of ETF management at Korea Investment Trust. He also cited ongoing U.S.-China trade tensions and won-dollar exchange volatility as drivers of caution.
The shift comes as the KOSPI index, after surging earlier this year on hopes of government stimulus, has been hovering between 3,100 and 3,200 since early August. Disappointment over tax reforms, lingering trade uncertainties, and global market volatility have weighed on sentiment.
Still, some analysts expect a rebound in September as policy uncertainties ease and investors see the August correction as complete. Optimism was also visible in ETF flows earlier this week: Samsung’s KODEX Leverage, which amplifies the KOSPI 200’s movements twofold, drew the day’s largest inflow of 167.9 billion won. A leveraged product tied to the KOSDAQ 150 index also ranked among the top three.
The diverging flows suggest investors are hedging their bets — seeking shelter in bond ETFs while simultaneously positioning for a potential equity rebound.
M. H. Lee (mhlee@koreabizwire.com)
