Korea Capital Market Institute

Since the global financial crisis, the growth of publicly offered funds has stalled compared to privately placed funds and discretionary investments (PF &DI), and a large number of retail investors are moving away from the publicly offered equity fund market. Although some of the capital outflows moved to other types of publicly offered or privately placed funds, most of them seem to have fled the fund market. In addition, there has been a persistent pattern in the post-crisis era where capital inflows occur during the stock market downturn, and outflows during the upturn. This implies that the central pillar of the asset management market is shifting towards PF&DI. More importantly, publicly offered funds are losing its key demand base as retail investors increasingly avoid publicly offered funds. Hence, both the financial authorities and the industries should make efforts to pursue the balanced development between publicly offered funds and PF&DI.