National Growth Fund for Public Participation TF Launched... Targeting June Release

Product Structure to Be Finalized by March
Product Allowing Direct Public Participation to Launch

The "National Growth Fund for Public Participation," which allows ordinary citizens to share in the growth achievements of advanced strategic industries through public offering funds, has officially entered the product design stage. Financial authorities have launched a public-private task force (TF) to finalize the product structure by March and plan to launch a product that the general public can directly subscribe to as early as June.

On January 28, the Financial Services Commission held a TF meeting for the "National Growth Fund for Public Participation," presided over by Son Youngchae, head of the National Growth Fund Promotion Team, to gather opinions from private sector experts on the product structure and management methods. The TF included participants from the Financial Services Commission, Korea Development Bank, Korea Financial Investment Association, and representatives from the asset management industry.

The National Growth Fund for Public Participation is structured so that the general public invests funds in the form of a public offering fund, which is then diversified across multiple sub-funds managed by private investment management experts. The aim is to promote both asset building for citizens and the expansion of the capital market base through long-term investment products focused on advanced strategic industries.

The government aims to raise 600 billion won annually through this fund, targeting a total of 3 trillion won over the next five years. Separately, 120 billion won in fiscal funds will be injected as subordinated support. To further incentivize investment, significant tax benefits have been designed. Depending on the investment amount, the income deduction rate can be applied up to a maximum of 40%, and a reduced separate tax rate of 9% on dividend income is being considered. These measures have been proposed to the National Assembly as amendments to the Restriction of Special Taxation Act.

TF participants agreed that these tax benefits, being higher than those of existing policy funds, would encourage public participation. At the same time, there was consensus on the need to design products that consider both the policy objective of long-term investment in advanced strategic industries and the fund’s rate of return.

Going forward, the TF will focus on discussing the main investment targets and ratios of the National Growth Fund for Public Participation, incentives and performance evaluation systems for management companies, and selection criteria for sub-fund managers. The Financial Services Commission plans to expedite TF discussions to finalize and announce the product structure by March, and to proceed with the selection process for public offering and sub-fund managers in parallel, aiming to launch the product around June.