Noranwoosan to Increase Operating Funds by 3 Trillion Won

[Asia Economy Reporter Park So-yeon] The Yellow Umbrella Mutual Aid, which manages the mutual aid business of the Korea Federation of Small and Medium Business (KBIZ), plans to increase its total operating funds by approximately 3 trillion won by the end of this year.

According to the financial investment industry on the 21st, the Yellow Umbrella Mutual Aid finalized its 2021 business plan and decided to increase its operating funds from 14.5 trillion won as of the end of last year to about 17.3 trillion won by the end of this year. Combining new investment amounts and matured receipts, the scale of operating assets will increase by approximately 2.8 trillion won (19.3%).

Asset allocation will also be adjusted to suit the economic situation after COVID-19. Currently, assets are allocated with bonds at 62%, alternatives at 19%, and stocks at 15.5%. By the end of this year, this will be adjusted to bonds at 56%, alternatives at 25%, and stocks at 15.5%.

Jung Doo-young, Chief Investment Officer (CIO) of Yellow Umbrella Mutual Aid Asset Management Headquarters, said, "This year, we plan to keep the stock investment ratio unchanged, reduce bond investments, and increase alternative investments," adding, "We plan to allocate about 120 billion to 150 billion won to blind funds in the VC sector."

Yellow Umbrella Mutual Aid is one of the fastest-growing institutions in terms of operating asset size among domestic pension funds and mutual aid associations. The operating asset size, which was around 5 trillion won in 2016, more than doubled to 11.8613 trillion won in 2019. The growth rate has maintained around 20% in recent years.

Last year, the operating asset size increased by 2.6569 trillion won (22.4%) to reach 14.5182 trillion won. The operating yield last year was 4.94%, exceeding the target yield of 3.5%, generating a profit of 585 billion won.

The total mutual aid contributions amount to 14.8 trillion won. To ensure mutual aid stability, reserves (contributions and interest reserves) of 16.0425 trillion won have been accumulated.

Yellow Umbrella Mutual Aid is a mutual aid system for small business owners and small merchants to prepare retirement funds (lump sums), managed and supervised by the Ministry of SMEs and Startups under the Small and Medium Enterprise Cooperative Act, and operated by the Korea Federation of Small and Medium Business.

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