csnews.blog  ·  Field Note No. 05  ·  Finance
May 19, 2026  ·  Launches in 3 Days (May 22)

Korea’s National Growth Fund:
The ₩600B Fund Where
Government Takes the First Loss

A government-backed fund investing in AI, chips, biotech, and 9 other strategic industries — with built-in downside protection and up to ₩18M in tax deductions. It opens May 22. First-come, first-served.

Government absorbs the first hit.
You keep the upside.”

§01  Structure

A public-private hybrid: government money absorbs losses first

The National Participation Growth Fund is not a typical public fund. The government commits ₩120B as a subordinated (junior) co-investor in each sub-fund, absorbing losses before retail investors are impacted.

⚠️ Important: This does not guarantee 20% of each individual’s investment. The government’s ₩120B absorbs losses first — but if total losses exceed the government’s stake in a given sub-fund, retail investors bear the remainder. The effective buffer ratio (vs. total sub-fund NAV including seed capital) is lower than 20%.

Retail money is pooled into three public funds (Mirae Asset, Samsung, KB Asset Management) which then invest into 10 specialized sub-funds. All three public funds share the same portfolio — it doesn’t matter which one you join.

Step 1
Public Capital
₩600B target
25 banks & brokers
Step 2
3 Public Funds
Mirae · Samsung · KB
Step 3
10 Sub-Funds
Large (₩120B) ×2
Mid (₩80B) ×4
Small (₩40B) ×4
Step 4
Strategic Industries
AI · Chips · Bio
12 sectors total
Each sub-fund must invest 60%+ in strategic industry companies, with 30%+ going to unlisted or KOSDAQ tech-special-listed companies as fresh capital. The goal: prevent promising Korean startups from dying in the “death valley” of scale-up financing.

§02  By the Numbers

Four numbers that define this fund

₩600B Public Capital Target
Via 25 banks & brokers
First-come, may close early
₩18M Max Tax Deduction
On ₩70M invested
+ 9% flat dividend tax (5yr)
20% Gov’t First-Loss Buffer
Per sub-fund NAV
Government absorbs first
5 yr Maturity (No Early Exit)
Closed-end fund
Best for long-term holders
10 Selected Sub-Fund Managers
  • Large — ₩120B each (×2)DS Asset Mgmt · Mirae Asset
  • Mid — ₩80B each (×4)Life · Midas · Timefolio · Korea Investment Value
  • Small — ₩40B each (×4)TheJ · Susung · Orion · KB Asset Mgmt

§03  Tax Benefits

The bigger you invest, the more you save

Investing through a dedicated account (전용계좌) unlocks income deductions on a tiered basis. Dividend income is taxed at a flat 9% rate for 5 years from investment date — vs. the standard 15.4% withholding. You can still invest via a general account (annual ₩30M cap) without tax benefits.

Investment Amount Deduction Rate Deduction Value Est. Tax Saved (22% bracket)
Up to ₩30M 40% Up to ₩12M ~₩2.64M
₩30M – ₩50M 20% +₩4M +~₩0.88M
₩50M – ₩70M 10% +₩2M +~₩0.44M
Maximum total ₩18M ~₩3.96M+

Actual tax savings depend on your personal income tax bracket. Consult a tax professional. The 5-year dividend flat-tax applies only to dedicated account holders. Income deductions apply at year-end tax filing.

§04  Who Can Invest

Eligibility, limits, and the fine print

  • 1
    Age: 19+ (or 15+ with employment income) For tax-benefit dedicated accounts. Anyone subject to consolidated financial income tax in any of the past 3 years is ineligible for the dedicated account — but can still use a general account.
  • 2
    Limit: ₩100M/year via dedicated account (₩200M over 5 years) General account: ₩30M/year. Dedicated accounts can be opened at multiple brokers. Minimum investment: ₩0–₩1M (set by each distributor).
  • 3
    Low-income priority: ₩120B reserved (20% of total) Full allocation goes on sale from May 22 for everyone — but ₩120B is tracked as a low-income reserved tranche (≤₩50M wage income or ≤₩38M composite) through June 4. Unsold reserved shares open to all in week 3.
  • 4
    Required docs: Income Certificate (ISA type) + ID Get the ISA Income Verification Certificate from NTS Hometax or Gov24 before launch day. General account investors (no tax benefit) do not need the certificate. Ages 15–19 also need an Income Amount Certificate.
  • 5
    Sale: May 22–June 11, 3 weeks, first-come first-served Branch + online simultaneously. First-week online capped at 50%. Minimum: ₩100K (Meritz, Shinhan Investment, IM, Yuanta, Hanwha) or ₩1M at most others. KB, Daishin, Mirae Asset allow pre-account setup from May 22 midnight.

§05  Risks to Know

This is not a government guarantee

The first-loss buffer is a structural safeguard, not a guarantee. Before investing, understand these four risks clearly.

Lock-up Risk

No redemption · Lump-sum only

Closed-end fund — no redemption before the 5-year maturity. Exchange-listed but expected to be illiquid; trading prices likely below NAV. No installment/DCA investing — full amount must be paid upfront at subscription. If you might need cash before 2031, size accordingly.

Tax Clawback

Transfer within 3 years triggers clawback

If you sell or transfer within 3 years of investment, previously deducted income tax and dividend tax benefits are clawed back. To keep the full tax advantage, you must effectively hold for at least 3 years.

Loss Risk · Grade 1 (Highest)

Principal loss possible — highest risk class

Officially classified as Risk Grade 1 (highest) under Korean financial regulations. Investors must pass a suitability assessment before subscribing. The government buffer absorbs losses first — but losses beyond that are borne by investors. Unlisted/venture focus means high volatility.

Fees

~1.2% annual management fee

Combined public fund + sub-fund fees total ~1.2%/year (online ~1.0%). Over the full 5-year hold, you pay roughly 6% in total fees. This is lower than the typical Korean private FOF average of 1.8–2.5%.

Field Note No. 05

“We fund the industries
that define the next decade.
And when they grow —
so do we.

On sale May 22–June 11 · 25 banks & brokers in Korea

Mirae Asset · Samsung · KB Asset Management — same portfolio, any of the three

This post is for informational purposes only and is not investment advice. Read the fund prospectus and consult a financial professional before investing.

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