Data from Fitch Rating shows South Korea’s money market funds (MMFs) have benefitted significantly from investors’ retreat from China.
Assets under management stood at KRW172.7 trillion as of May 31, up by 22% since September 30.
According to the rating agency, the increase was driven by institutional investors pivoting assets towards high-quality investments, such as MMFs.
Rising interest rates also contributed to the increase, stated Fitch.
Money market funds make up roughly 19% of South Korea’s collective investment schemes’ total AuM., which is in line with the rest of the region. However, Fitch also states that Korean MMFs are generally considered more volatile than their global counterparts, thereby “highlighting the importance of prudent liquidity management for asset managers” stated the Fitch report.
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