The financial sector held more than half of outstanding government bonds as of September 2008, amounting to KRW200 trillion. Investors in the financial sector include domestic and foreign banks, and investment banks and brokerages, among others. Asset-pooling investors also participate in the bond market.

Major investors include domestic and foreign banks, investment banks and brokerages, investment trust companies, and other financial institutions. Retail investors still hold small amounts of outstanding government and corporate bonds.

Pension Funds

The National Pension Service (NPS) controls national pensions in the Republic of Korea. It held a portfolio of about KRW220 trillion as of 2007. About 80% of the funds placed in financial markets were invested in fixed-income securities.

Asset Management Companies

The asset management companies in the Republic of Korea include investment trusts, mutual funds, and trust accounts of commercial banks and securities companies. The industry comprises about 50 asset management companies authorized by the Financial Supervisory Commission (FSC), with combined assets of KRW2.3 trillion as of September 2007.

Bond funds have at least 60% of their assets invested in their respective core securities. There are other variations, including spot funds and derivatives investment trusts. There are also funds that specialize in high-yield bonds, many of which have tax-exempt features to attract risk-tolerant investors.

In July 2005, the Ministry of Strategy and Finance (MOSF) established the Korea Investment Corporation (KIC) as an independent agency managing foreign reserves and public funds.

Insurance Companies

The Republic of Korea has the largest insurance industry in Asia outside of Japan. Total insurance assets as of September 2007 were KRW352 trillion, comprising KRW291 trillion in life insurance and KRW61 trillion in nonlife insurance.