Third-quarter funds draw 46.9 trillion won, but net assets plunge by 87.8 trillion...Four-year rise comes to an end

[Financial News] A net 46.9 trillion won flowed into South Korea’s fund market in the third quarter, yet net assets fell by 87.8 trillion won. The decline was driven by a steep drop in asset values, particularly in equity funds and exchange-traded funds (ETFs), as the KOSPI fell by more than 19%. As a result, the quarterly growth in fund net assets that had continued since the second quarter of 2022 came to an end for the first time in about four years.
On the 30th, according to the Korea Financial Investment Association’s ‘2026 Third-Quarter Fund Market Trends,’ total net assets of all public and private funds stood at 1,646.7 trillion won at the end of September. That was down 87.8 trillion won (5.1%) from 1,734.5 trillion won at the end of the previous quarter.
The fund market grew 5.9% in the third quarter and 5.2% in the fourth quarter of last year, followed by strong growth of 8.5% in the first quarter and 16.1% in the second quarter of this year. But as a stock market correction gathered pace in the third quarter, growth turned into a decline.
Notably, net assets fell even as new money flowed into funds. A net 46.9 trillion won flowed into all funds in the third quarter, including 39.5 trillion won into public funds and 7.5 trillion won into private funds. The contraction in the fund market appears to have been driven more by declining asset values amid the stock market downturn than by outflows.
Equity funds saw a particularly sharp decline. Although they received net inflows of 17.1 trillion won, their net assets fell by 58.2 trillion won (13.0%). This was due to the steep drop in the value of their assets as the KOSPI fell 19.3%, from 8,476.5 to 6,838.0, over the same period.
Derivative funds also saw net assets fall by 24.2 trillion won despite net inflows of 7.2 trillion won. The combined decline in net assets of equity and derivative funds was 82.4 trillion won, about 94% of the 87.8 trillion won drop in net assets across all funds. By contrast, money market funds (MMFs) grew by 7.6 trillion won, bond funds by 700 billion won, and real estate funds by 600 billion won.
ETFs, which had led fund market growth in the first half of the year, were also hit hard. ETF net assets, which stood at 512.4 trillion won at the end of June, fell by 54.7 trillion won (10.7%) to 457.7 trillion won at the end of September. That accounted for about 62% of the decline in net assets across all funds.
ETFs’ share of public funds also fell, from 57.1% at the end of the second quarter to 55.1% at the end of the third. Over the same period, net assets of public funds excluding ETFs dropped by 12.3 trillion won, from 385 trillion won to 372.6 trillion won.
Total net assets of public funds fell by 67 trillion won (7.5%), from 897.4 trillion won to 830.4 trillion won. Private funds also declined by 20.8 trillion won (2.5%), from 837.1 trillion won to 816.3 trillion won. 
 

[email protected] Kim Hyun-jung Reporter