Recent Trends and Perspectives on the Korean Asset Management Industry

Abstract

There has been a surge in the number of retail investors in the Korean market since early 2020. Although investment by individuals increased sharply, the trend is not reflected in indirect investments (e.g., mutual funds) because retail investors have preferred to invest directly in stocks. There are several reasons for these patterns that are unique to the Korean market, but the overall trend maybe more relevant to the global market. In this article, the authors discuss the recent movement by retail investors in Korea, its possible causes, its effect on the Korean asset management industry, and how asset management firms can adapt to these changes. Moreover, insights from industry leaders are also presented to share the views of the Korean asset management industry.

TOPICS: Security analysis and valuation, emerging markets, wealth management

Key Findings

• ▪ Investment by individuals in the Korean market has surged since early 2020, but retail investors have preferred to invest in stocks as opposed to indirect investments such as mutual funds.

• ▪ Although these trends are partially due to retail investors obtaining market news and analysis through new media, asset management firms could provide further value to individuals by offering personalized products and services.

• ▪ This article discusses how asset management firms can adapt to these changes and presents insights from industry leaders to share the views of the Korean asset management industry.