Despite the "Open Run" and Sold-Out Success, Why Did Financial Services Commission Employees Not Subscribe to the National Growth Fund?

Loss Protection and Tax Benefits Drive Popularity
Virtually Sold Out Within Two Days of Launch
"Giving Priority to the Public"
Additional Supply Considered Amid Unexpected Demand

The National Participation-Type National Growth Fund achieved great success, selling out completely within just three days of its launch. However, it has been revealed that the Financial Services Commission, which designed and promoted the fund, actually advised its own employees to refrain from subscribing.

On the first day of subscription to the National Participation Growth Fund on the 22nd, a notice of sales closure due to limit exhaustion was posted at the main branch of Woori Bank in Jung-gu, Seoul. Photo by Yonhap News.

According to the Financial Services Commission on May 28, Son Young-chae, head of the National Growth Fund Task Force, posted a request on the company’s anonymous bulletin board on the 21st, urging employees to refrain from subscribing to the fund. The reason was that, since the National Growth Fund is a policy product intended to support the accumulation of assets by the general public, investment opportunities should be given primarily to ordinary citizens. Comments under the post reportedly showed broad agreement with Son's opinion among the staff.

Kwon Dae-young, Vice Chairman of the Financial Services Commission, also shared the view that investment opportunities should be prioritized for the public, aligning with Son’s stance. Within the commission, only Chairman Lee Eogwon visited the Seoul Government Complex branch of NH Nonghyup Bank for promotional purposes and subscribed to the fund, purchasing 10 million won worth.

The National Growth Fund, launched on May 22, was so popular that it even sparked an “open run” phenomenon. President Lee Jaemyung also mentioned the fund’s success at a recent cabinet meeting at the Blue House. President Lee said, “The total sales of the National Participation Growth Fund is 600 billion won, which doesn’t seem like a huge amount,” and added, “I’ve even received messages asking, ‘Why don’t I have the opportunity to subscribe?’”

As of 5:00 p.m. on the 27th, approximately 99.5% of the total 600 billion won fundraising target had been sold, amounting to 597.1 billion won. All online and offline allocations from 10 banks, as well as online allocations from 15 securities firms, have been exhausted. Currently, only 2.9 billion won worth of offline allocation remains at Woori Investment & Securities. On the first day of the fund's launch, 87% of the entire allocation was sold, and by May 26, right after the holiday, the sales rate had soared to 97.5% (about 585 billion won), demonstrating the rapid pace at which capital was concentrated.

The National Growth Fund is operated by raising 600 billion won from the public and 120 billion won from government finances to create a master fund, which is then invested in 10 sub-funds. The main factors behind its popularity are tax benefits and a loss compensation structure. In the case of losses in the sub-funds, government finances will absorb up to 20% of losses first, and tax incentives such as income deductions are also provided.

Given the unexpectedly strong demand, the Financial Services Commission is considering an additional supply in the second half of the year. The commission had originally planned to create a 600 billion won fund each year for the next five years starting this year. The commission is expected to decide as early as next week on the scale and timing of the additional supply.

This content was produced with the assistance of AI translation services.