The National Growth Fund, heavily promoted by the government as providing up to 20% loss coverage, has entered a loss phase shortly after its launch, leading to growing dissatisfaction among investors. This discontent has intensified, particularly following a recent sharp decline in the domestic stock market, resulting in some investors already experiencing principal losses.
On August 4, various online communities shared posts titled 'Current Status of the National Growth Fund, which promised to cover losses up to 20%.'
One post included a screenshot showing an investor's status in the KB National Growth Mixed Fund, revealing a drop in the investment from 15 million won to a current valuation of 14,329,800 won. The loss rate was reported at -4.47%, with a valuation loss of approximately 670,200 won.
This fund is part of a government initiative aimed at revitalizing the domestic stock market and promoting a culture of long-term investment. At its launch, the fund's structure, which promised to cushion losses up to a certain level, led to a rapid sell-out.
However, some investors have misunderstood the loss coverage structure. The so-called '20% loss coverage' does not guarantee that investors will not incur losses; rather, it serves as a mechanism to cushion some losses under specific conditions. Consequently, the fund's valuation can decline based on market conditions, and principal losses can occur.
As volatility in the domestic stock market has increased, concerns have emerged in online communities about whether the 20% loss coverage threshold has already been breached.
Comments from users included remarks such as, 'The five directors—Lee Jae-myung, Kim Yong-beom, Lee Chan-jin, Kim Sung-joo, and Lee Ok-won—are scrambling to cover up their mess,' and 'If this had come out earlier, wouldn't we be looking at a -30% loss?' Others expressed frustration, saying, 'Why should I be forced to buy this?' and 'It's already funny that we're breaching the 20% mark.' One user quipped, 'National participation is over; it's time for national incineration.'
Experts advise that even with a loss cushioning mechanism, funds are fundamentally performance-based financial products, meaning that principal is not guaranteed. They stress the importance of understanding the loss coverage methods and conditions before investing.
* This article has been translated by AI.
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