Housing and Urban Fund achieved 1.1557 trillion won in stock investment profit in the first half of the year

As the domestic stock market showed strength this year, the Housing and Urban Fund was found to have earned close to 1.2 trillion won in profits through the management of surplus funds in the first half of the year.

In particular, profits exceeding 800 billion won from domestic stock investments alone exceeded last year's total annual operating profits.

According to data submitted by Housing and Urban Guarantee Corporation (HUG) by Rep. Yoon Jong-gun of the Democratic Party of Korea, a member of the Land, Infrastructure and Transport Committee of the National Assembly on the 6th, the Housing and Urban Fund made a profit of 1.1557 trillion won from January to June of this year through management of surplus funds. This is 1.9 times the operating profit of 614.2 billion won last year.

The Housing and Urban Fund is a fund that is created using subscription savings and national housing bonds as its main financial resources and is used for housing purchase and lease loans and the supply of public housing.

Most of the fund's operating profits in the first half of this year came from domestic stocks.

Profit from domestic stock assets amounted to KRW 803.7 billion, which was 3.5 times higher than last year’s annual domestic equity investment revenue (KRW 232.8 billion). It also generated profits of 227.9 billion won from overseas stock assets.

On the other hand, the profit from domestic bond-type assets was 20.8 billion won, foreign bond-type assets were 3.3 billion won, and alternative investments were 52.2 billion won.

It is interpreted that as KOSPI has shown strength this year, profits from domestic stock-type assets have increased significantly.

A HUG official explained, "The fund is investing through a management company according to a predetermined asset allocation. The significant increase in domestic stock profits this year is largely due to the good domestic stock market rather than an aggressive change in management strategy."

HUG explains that since the Housing and Urban Fund is based on debt resources that must be returned in the future, such as subscription savings that can be canceled at any time and national housing bonds with a five-year maturity, it is difficult to invest aggressively compared to the national pension, which manages funds over several decades.

As of the end of July this year, domestic stock-type assets amounted to 900 billion won, accounting for 7.0% of total spare funds. The domestic bond type was the largest at KRW 7 trillion (52.0%), followed by alternative investment at KRW 2.3 trillion (17.1%), foreign stock type at KRW 1.3 trillion (9.4%), and foreign bond type at KRW 700 billion (5.1%).

As of the end of July this year, the fund's overall operating rate of return was 5.71%, exceeding the target rate of return of 4.05% by 1.66 percentage points. The domestic stock rate of return was calculated to be 71.60%.

Although high operating profits were achieved in the first half of this year, the amount of spare funds held by the Housing and Urban Fund has decreased significantly compared to 2021.

The fund's free funds have decreased for three consecutive years, from 49 trillion won in 2021 to 28.7 trillion won in 2022, 18.9 trillion won in 2023, and 10.1 trillion won in 2024. After rebounding to 14.4 trillion won last year, it recorded 13.5 trillion won at the end of July this year. Compared to 2021, it has decreased by 72.4% (KRW 35.5 trillion) in 5 years.

HUG explained that while fund raising through subscription savings and national housing bonds decreased and policy loan spending expanded, free funds decreased.

The actual amount of funds raised through subscription savings decreased from 23.1 trillion won in 2021 to 18.3 trillion won in 2022, 15 trillion won in 2023, and 14.8 trillion won in 2024, before increasing to 15.2 trillion won in 2025.

National housing bond income also decreased from 18.8 trillion won in 2021 to 13.4 trillion won in 2023, but then increased to 15.2 trillion won last year.

An HUG official said, "While subscription savings decreased and national housing bond income decreased due to the real estate recession, fund expenditures increased as the supply of policy loans expanded. From 2024, special loans for newborns were also supplied."

However, HUG's position is that the current amount of surplus funds exceeds the appropriate level required for fund operation.

HUG manages the appropriate level of surplus resources for the Housing and Urban Fund at approximately KRW 8 trillion, taking into account short-term funds, illiquid assets, and debt repayments. As of the end of July this year, surplus funds amounted to 13.5 trillion won, which is 5.5 trillion won more than the appropriate level suggested by HUG.

Representative Yoon Jong-gun said, “The fact that the Housing and Urban Fund has earned a large operating profit due to the KOSPI boom will be a great help in stabilizing housing for the common people,” and emphasized, “Government authorities must strengthen the fund’s management capabilities to ensure unwavering support for housing stability.”