Foreign Stock Funds Experience Largest Outflow in Five Years

Last month, the domestic securities market witnessed a staggering net outflow of $1.7 billion in foreign investment funds. This dramatic shift was primarily due to massive withdrawals from the stock market, overshadowing the significant influx into the bond market.

Continued Decline in Stock Market Investments

According to the Bank of Korea's report on International Financial and Foreign Exchange Market Trends since April 2025, foreign investment funds in the domestic stock market recorded a net outflow of $9.33 billion. This marks the ninth consecutive month of net outflows, a trend that began in August last year. The escalation in global trade uncertainty, spurred by the United States' announcement of reciprocal tariffs, has significantly dampened global investment sentiment, leading to the largest monthly net outflow since March 2020.

Bond Market Bucks the Trend

In stark contrast, the bond market enjoyed a net inflow of $7.63 billion, a notable increase from the previous month's $4.83 billion. This surge is attributed to sustained demand for long-term bonds and ongoing arbitrage opportunities.

Foreign Exchange Market Volatility

The won-dollar exchange rate peaked at 1,484.1 won on April 9, reaching a yearly high amidst deteriorating investment sentiment due to escalating U.S.-China trade conflicts. However, the rate saw a considerable decline following rumors of postponed U.S. tariffs and advancements in trade negotiations between the two economic giants.