Korea's second National Growth Fund widens the loss buffer under retail savers to as much as 23.3%

On the report's description, losses at each underlying private fund fall first on government fiscal money and the managers' own capital ^[3]. Retail savers, who hold the senior position, take a loss only once it passes that fund's buffer of 18.8% to 23.3% ^[3][4]. The range moved up 1.3 percentage points at the bottom and 2.5 points at the top ^[1]. The thickest cushion is now about 12% larger than the first fund's thickest, and the thinnest about 7% larger ^[2]. Spread over roughly 10 underlying funds, the 600 billion won cap averages about 60 billion won per fund ^[6].

If the underlying funds return well, the cushion never gets touched and savers keep the private-market return plus the tax breaks ^[5]. If a fund loses less than its buffer, the state and the manager absorb it ^[3]. If it loses more, the excess reaches savers, because the report sets the buffer at the level of each underlying fund ^[4].

For a small saver, the tax terms are bigger numbers than the cushion. The tiers add up exactly: 40% of the first 30 million won is 12 million, 20% of the next 20 million is 4 million, 10% of the next 20 million is 2 million, and the total is the 18 million won cap ^[3]. That deduction equals 40% of a 30 million won contribution and about 25.7% of a 70 million won one ^[4]. The 40% rate on the first slice is about 2.1 times the 18.8% bottom of the loss buffer ^[5]. The two figures measure different things, though: a deduction comes off taxable income, so its cash value is the deduction times the saver's marginal rate. Holders who stay the full five years also get a separate 9.9% rate on dividend income ^[10].

I think the terms support the view that savers are being sold protection and tax relief. The report credits the second fund to the rapid sellout of the first ^[1]. A sellout measures demand. The only term the report compares across the two funds is the buffer, and it moved toward more protection ^[4]. The counter-case is in the same report: the first-loss layer includes the managers' own capital ^[3]. If managers funded most of the added room, the wider buffer means they are staking more of their own money on their picks, which would be a bet on asset quality. The report does not say how the buffer divides between state and manager money, or how the profit side of the "tiered loss and profit" structure pays the junior layers for standing first ^[13].

The allocation rules push the deduction out to new savers. First-fund buyers cannot open a dedicated account this time and are held to a combined 30 million won in general accounts for 2026 ^[6]. Anyone taxed on comprehensive financial income in any year from 2023 to 2025 is also shut out of dedicated accounts ^[7]. Half the offering is reserved until October 7 for savers on salaries of 50 million won or less ^[12]. The first round's buyers do not get a second dedicated account with its 100 million won annual limit ^[6][8].

The first exchange price comes within 90 days of the fund's establishment ^[11]. A holder who sells inside three years may have to repay the tax benefits ^[11]. An early sale therefore prices the private-fund exposure after that seller has given back the subsidy. If the listed price sits near the subscription level in that window, the underlying assets are holding value without the tax support, and the view here is wrong.