[Asia Exclusive] Hit Product Pilseung Korea Fund, Achieving 30% Return Rate

Focused on SMEs in the Materials, Parts, and Equipment Sector, the Burden Was Great
Success Achieved Through Bold Preemptive Measures and Social Attention
Tax Benefits Must Be Expanded to Grow Public Offering Funds

[Asia Economy Reporter Minji Lee] Baek Young-hoon, CEO of NH-Amundi Asset Management, is the key figure who elevated the company's standing to the next level. Not only did he make the Pilseung Korea Fund a hit, boosting NH-Amundi Asset Management's brand value, but he also grew the assets under management from 40 trillion won to 46.2 trillion won in less than a year since his appointment. Among domestic comprehensive asset management firms, this growth rate is by far the highest.

Baek Young-hoon, CEO of NH-Amundi Asset Management, is being interviewed by Asia Economy on the 30th. / Photo by Moon Ho-nam munonam@

Contrary to market concerns, the Pilseung Korea Fund has been sailing smoothly with a 30% return since its inception. This fund was designed to invest in domestic materials, parts, and equipment companies after Japan imposed export restrictions on semiconductor and display materials as trade retaliation in July last year. At the time of its launch, reflecting political and economic circumstances, there were concerns that it might lose popularity suddenly like past unification funds or green funds. Doubts were also raised about whether localization could be successful. However, CEO Baek judged that if trade friction with Japan continued, localization would inevitably be necessary, and decided to launch the product.

CEO Baek said, "At first, I felt a heavy burden thinking that we needed to include more materials, parts, and equipment companies than large-cap stocks, and that returns could drop significantly if the economy declined. Still, I believed it was worth putting it out into the market at least once, and that proactive measure proved effective." He explained, "Despite low investor interest in public funds, starting with the president, members of the National Assembly, ministers and vice ministers, and local government heads subscribed, which naturally drew high market attention, and I am grateful for that." Since its inception, about 330 billion won has flowed into the Pilseung Korea Fund.

Recently, the asset management industry has been struggling with the prolonged sluggishness of public funds. Even star funds managing over 1 trillion won have disappeared from the market except for the 'Shinyoung Value High Dividend Fund.' As investors face continued low returns, they are moving money to private markets using more aggressive management techniques or to individual stocks. This trend has intensified since COVID-19.

CEO Baek emphasized, "There are clearly limits to growth through individual asset management firms' capabilities in the public fund market," adding, "Tax benefits for public funds should be expanded to circulate funds in the public market." According to recent financial tax reform plans, tax deduction benefits applied to direct stock investors are not extended to fund investors. While a 20 million won basic deduction is applied to listed stocks, if one earns 20 million won through stock-type funds, they must pay 4 million won (20% financial investment income tax) in taxes.

CEO Baek pointed out, "Public funds are well-diversified, making them safer products than individuals directly purchasing stocks. Considering they help disperse risks from market shocks, they actually need more tax deductions, but it is very concerning that they are not viewed by the same standards as ordinary stocks." He added, "Taxation on fund investments is imposed one year earlier than on stock capital gains, which will also deal a significant blow to the asset management industry."

▲ Baek Young-hoon, CEO of NH-Amundi Asset Management = Born in 1960 in Muan, Jeonnam. He graduated from Gwangju Ilgo High School and majored in Agricultural Economics at Chonnam National University, then earned a master's degree in Business Administration from Hanyang University. He began his career in 1985 at the National Agricultural Cooperative Federation. Afterwards, he served as head of the Risk Management Team, head of the Investment Finance Department, and head of the Comprehensive Planning Department at Nonghyup Bank before moving to NH-Amundi Asset Management as Chief Marketing Officer (CMO, Executive Director) in 2017. In August last year, he was appointed CEO of NH-Amundi Asset Management and is approaching his first anniversary in office.