South Korean MMF AuM hits record as institutional investors seek safer assets

Written by Adam Cadle

09/06/2023

South Korean money market fund (MMF) AuM stood at a record KRW172.7trn at end-May 2023, up by 22% since end-September 2022, Fitch Ratings has revealed.

The increase was driven by institutional investors pivoting assets towards high-quality investments, such as MMFs, the credit rating agency added. Rising interest rates also contributed to the increase.

South Korean MMFs represent approximately 19% of the country’s collective investment scheme AuM, a similar level to that in the Asia-Pacific and the US regions, where MMFs constituted 23% and 16%, respectively, of total AuM, according to ICI data.

However, Korean MMF flows are more volatile than global MMFs and other Korean fund types, highlighting the importance of prudent liquidity management for asset managers, Fitch stated.

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