Among financial products operated through personal comprehensive asset management accounts (ISA), the proportion of financial investment assets invested in Korea has increased. It is interpreted that the size of domestic financial investment assets in ISA has also increased sharply as the domestic stock market continues to boom, with the KOSPI ranking first in the global stock market yield this year.
According to the Financial Investment Association on the 25th, the size of financial investment products such as stocks, exchange-traded funds (ETFs), and funds operated by ISA recorded 30 trillion won as of the end of August.
Among them, domestic investment products amounted to 19.8 trillion won, accounting for 66% of the total. It increased by 1 percentage point compared to the end of last year.
At the end of last year, domestic investment products amounted to 12.8 trillion won, accounting for 65% of the total 19.7 trillion won.
On the other hand, the proportion of overseas investment products decreased. The size increased from 6.9 trillion won to 10.2 trillion won during the period, but the proportion decreased from 35% to 34%.
The proportion of deposits has also decreased. The size increased from 13.7 trillion won to 15.2 trillion won, but the proportion decreased from 41% to 33.6%.
Looking at each financial investment product, the proportion of domestic investment ETFs increased 6.1 percentage points from 21.2% at the end of last year to 27.3% at the end of August. On the other hand, overseas investment ETFs fell from 78.8% to 72.7%.
The share of domestic funds also increased 2.3 percentage points from 45.6% at the end of last year to 47.9% at the end of August, but overseas funds fell from 54.4% to 52.1%.
Domestic stocks increased from 6.1 trillion won at the end of last year to 9.4 trillion won at the end of August, up from 30.7% to 31.4%.
ISA is an account-type product that can receive tax benefits while investing in various financial products such as domestic stocks, ETFs, funds, REITs (real estate investment companies), and deposits from a single account. It was launched in March 2016 to support property formation through comprehensive asset management of the people.
The biggest advantage of ISA is tax savings. After a certain period of time, profits and losses between financial products in the account will be tax-free up to 2 million won (up to 4 million won for ordinary people) based on net profit, and the amount exceeding this will be given a separate taxation benefit of a low rate (9.9%).
It has been pointed out that ISA has a high proportion of overseas investment financial products. However, this trend has also changed as the number of investment funds flowing into the domestic stock market has increased and the stock index has reached an all-time high.
The Korea Financial Investment Association analyzed, "The increase in demand to transfer from overseas investment assets to domestic investment assets is the main reason for the increase in the proportion of domestic financial investment products within ISA."
"Our people's demand for asset management through ISA is gradually expanding," said Lee Hwan-tae, head of the industrial market division of the Korea Financial Investment Association. "If long-term investment incentives such as tax benefits and increased subscription age increase, the inflow of funds to the domestic capital market will accelerate and productive finance will expand."
