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Asset Management Related Standards

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Target rate of return

KTCU is making the utmost efforts for the mid- and long-term operational rate of return of assets to achieve "additional rate of return to accomplish pay rates + rate of operating expenses + target rate of reserves."

Risk tolerance limit

  • Total annual risk tolerance limit is indicated by estimated risk amount of total loss according to annual asset allocation plan if estimated risk amount of net loss according to annual asset allocation plan is no more than annual transferred reserves.

    Estimated risk amount of total loss

    - Risk free assets profit estimation
    ___________________________________
    = If estimated risk amount of net loss ≤ transferred reserves,
    estimated risk amount of total loss = risk tolerance limit

  • Strategic asset allocation is established in consideration of the following risk torlerance limit.

    Shortfall risk for the next 5 years ≤ 10%

    The percentage of reserved fund rate to be reduced by 10% or above compared to the base year according to asset allocation plan must be 5% or below

Mid-and Long-term Asset Allocation

  • KTCU manages assets for investment by dividing them into assets for stocks, bonds, alternative investment, member loans, short-term assets, tangible/intangible assets, and others.
  • KTCU implements asset allocation based on target rate of return and risk tolerance limit set in consideration of asset characteristics and manages assets accordingly.
  • Mid- and long-term asset allocation

    [By 2020]

    Organization
    Domestic stocks Domestic bonds Foreign stocks Foreign bonds Alternative investment Member loans
    9.5% 20.0% 4.9% 10.5% 36.0% 19.1%
  • KTCU manages assets flexibility by deliberating mid- and long-term asset allocation plans through Asset Management Committee and adjusting assets tactically through Asset Allocation Council.