Invests in AI, semiconductors, energy and biotech

Government, private equity fund managers absorb losses first to protect retail investors

[Provided by KB Asset Management]
[Provided by KB Asset Management]

KB Asset Management said Thursday it is accepting first-come, first-served subscriptions through Oct. 15 for the KB National Participation National Growth Fund 2, capped at 200 billion won ($149 million), which invests in future key industries including AI, semiconductors, energy and biotech. Starting Thursday, all members of the public may subscribe freely, with no priority allocation reserved for low-income investors.

Investors who sign up through a dedicated account are eligible for income deductions of 10 to 40 percent depending on the amount invested. A subscription of 30 million won qualifies for a 12 million won deduction, a 50 million won subscription for a 16 million won deduction, and subscriptions of 70 million won or more for a maximum deduction of 18 million won. Dividend income is also subject to a separate flat tax rate of 9.9 percent.

The fund is open to domestic residents aged 19 or older, or workers aged 15 or older. Investors may contribute up to 100 million won per year, with a total cap of 200 million won over five years.

However, anyone who was subject to comprehensive financial income taxation at any point between 2023 and 2025 is ineligible. Investors who participated in the first National Growth Fund are also barred from opening a dedicated account for the second fund, though they may subscribe through a general account at a different distributor. General account subscriptions are capped at a combined 30 million won across all National Participation National Growth Fund products in 2026.

The fund is available online and in person through KB Kookmin Bank, Industrial Bank of Korea, iM Bank, KB Securities, Korea Investment & Securities, Hanwha Investment & Securities, Daishin Securities, iM Securities and Kiwoom Securities.

The KB National Participation National Growth Fund 2 was designed under the government's National Growth Fund policy to give retail investors diversified exposure to future key industries that are typically difficult to access directly. A key feature is a reinforced loss-mitigation structure for retail investors, achieved by expanding subordinated capital contributions.

The government and the underlying private equity fund managers contribute capital on a subordinated basis, meaning they absorb losses before retail investors. Subordinated investors absorb the first 18.8 to 23.3 percent of losses at the level of each underlying private equity fund — a wider subordinated buffer than was offered under the first fund.

"The National Participation National Growth Fund is a tax-efficient product that allows long-term investment in future key industries while also providing income deduction and separate taxation benefits," said Beom Gwang-jin, head of KB Asset Management's pension and wealth management division.

Meanwhile, KB Asset Management's KB On-Gukmin Qualified Target Date Fund (TDF) 2055 (UH) posted a five-year return of 88.57 percent. Citing fund evaluator FnGuide, KB Asset Management said the product ranked first in five-year returns among 115 TDF managers that operated over the same period, based on data as of Sept. 22. The fund pursues a lifecycle asset allocation strategy targeting retirement in 2055, spreading investments across growth assets such as shares and defensive assets such as bonds, and gradually shifting toward a more conservative allocation as the target retirement date approaches.


th5@heraldcorp.com