On a monthly basis, stock funds had logged net outflows for the previous six months as investors rushed to withdraw money amid a widespread perception that the stock index has reached its highest point. In the year to Monday, domestic stock funds registered a net outflow of 4.99 trillion won.

Analysts said some investors are returning to stock funds amid a market correction sparked by profit-taking and high geopolitical risks stemming from a standoff between the United States and North Korea over the latter's nuclear and missile programs.

"Money is flowing back to stock funds as a further advance in the benchmark index is being hampered by a lack of liquidity," said analyst Kim Hyung-ryeol from Kyobo Securities Co. "It's a positive sign for the local bourse."

Amid an inflow into stock funds, domestic institutional investors have replaced foreign investors as net buyers, helping bolster the market.

Institutions bought a net 1.3 trillion won in the first 22 days of this month, almost making up for 1.57 trillion won in net selling by offshore investors.

Market watchers said the domestic stock market will likely get a big boost next month, when the National Pension Service, the operator of South Korea's state pension program and biggest institutional investor, starts to put money into stock funds. (Yonhap)