South Korean asset managers' net profit in the second quarter more than tripled from a year earlier, supported by a rise in domestic stocks and the expansion of the exchange-traded fund (ETF) market. Assets under management also topped 2,700 trillion won. The share of firms posting losses increased, however.

According to the Financial Supervisory Service's "Asset management companies' business performance for the second quarter of 2026" released on Thursday, net profit for 513 domestic asset managers in the second quarter was 2.69 trillion won. That was up 1.22 trillion won, or 83.4 percent, from 1.47 trillion won in the previous quarter. It was up 1.83 trillion won, or 214.3 percent, from 855.5 billion won a year earlier.

Operating profit was 2.42 trillion won, up 78.9 percent from the previous quarter and 227.5 percent from a year earlier. Return on equity (ROE), annualised, was 51.9 percent, up 20.8 percentage points from the previous quarter.

The performance improvement was influenced by rising fee income such as management fees and performance fees. Fee income in the second quarter was 2.61 trillion won, up 714.1 billion won, or 37.7 percent, from the previous quarter.

Fund-related fees increased 39.1 percent to 2.03 trillion won, while discretionary management and advisory fees rose 33.1 percent to 574.6 billion won. Gains and losses from securities investment tied to proprietary asset management also rose 159.6 percent from the previous quarter to 829.7 billion won.

Asset managers' assets under management also rose sharply. At end-June, assets under management, combining net fund assets and discretionary investment mandates, totalled 2,777.5 trillion won. That was up 421.8 trillion won, or 17.9 percent, from end-March.

Net fund assets rose 16.1 percent to 1,730.9 trillion won, and discretionary mandate assets increased 20.9 percent to 1,046.6 trillion won.

Growth was particularly notable in publicly offered funds. Net assets of publicly offered funds rose 191.9 trillion won, or 27.2 percent, from the previous quarter to 897.4 trillion won. Over the same period, private funds rose 6.2 percent to 833.5 trillion won.

The expansion of publicly offered funds was influenced by a rise in the KOSPI and growth in the ETF market. Total net assets of domestic ETFs rose from 297.1 trillion won at end-2025 to 360.7 trillion won at end-March and 512.4 trillion won at end-June. They increased 42.1 percent in the second quarter alone.

Net assets of publicly offered equity funds also rose 54.1 percent to 407.7 trillion won at end-June from 264.6 trillion won at end-March. Mixed bond funds rose 49.7 percent and derivatives funds rose 37.9 percent.

Still, the industry did not see evenly shared gains. Among the 513 managers, 293 posted profits, or 57.1 percent. The share of loss-making firms was 42.9 percent, up 5.3 percentage points from 37.6 percent in the previous quarter.

Among 77 publicly offered fund managers, the share of loss-making firms was 14.3 percent, down 1.3 percentage points from the previous quarter. Among 436 private fund managers, the share rose 6.4 percentage points to 47.9 percent from 41.5 percent. The benefits of the stock market rise and ETF growth appear to have been concentrated among large publicly offered fund managers.

The watchdog said asset managers delivered strong quarterly earnings in the second quarter, helped by a rise in domestic stock indexes. It assessed that gains were driven by increased fund-related fee income, including management and performance fees, as well as increased securities investment profit from proprietary accounts.

It also pointed to risk factors, including concentration of investor funds into certain industries and stocks, excessive short-term trading in ETFs, and leveraged investment.

The watchdog plans to strengthen monitoring of managers with weak financial soundness and continue measures to ease market volatility, including curbing leverage and debt-funded investing, while pressing ahead with supervision and institutional improvements to encourage long-term investment.