Asset managers are solidly behind liquidity

In times of lingering uncertainty in the global financial market, how are asset management companies managing their properties?

According to the Financial Supervisory Service yesterday, asset management companies have expanded cash savings and deposits, a move seen as reducing the risks from financial fluctuations.

As of March, total wealth held by 84 asset management companies was 3.4 trillion won ($2.9 million), a 1 percent increase from the same period last year. Of total wealth being managed, 53.8 percent or 1.8 trillion won was secured in the form of cash and bank deposits, FSS data showed. The proportion is an increase from 52.3 percent in March 2012.

“Asset management companies are managing their wealth holdings in a form of safe assets,” the FSS said yesterday. “The slight increase in the volume of cash holdings comes as they are struggling to make a profit through fund investments.”

Out of 84 asset management companies, wealth being managed by 42 companies was all secured in the form of cash and bank deposits. Also, all 21 foreign asset management companies managed their property in cash and deposits.

Figures showed that asset management companies’ investment in securities dropped over the period. As of March last year, 37.3 percent of their property holdings were managed in the form of stocks, funds and bonds. However, the latest data shows the proportion dropped to 36.9 percent.

Meanwhile, fund managers have been struggling to create profits by carrying out various investments. Korea’s benchmark Kospi has been fluctuating recently, closing below the 1,800 level for the first time in 11 months on Monday.

Asset management companies have been greatly affected. From April 2012 through March, asset management companies’ total operating profit dropped 1.4 percent to 445.6 billion won, FSS data showed.

BY LEE EUN-JOO [angie@joongang.co.kr]