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Military Mutual Aid Association shows outstanding return-on-asset performance

(Military Mutual Aid Association)
(Military Mutual Aid Association)

The Military Mutual Aid Association, which provides pension services for military personnel, has been the most profitable mutual aid association in South Korea for the past three years, business data tracker CEO Score Daily said Friday.

Currently, the nation has seven large mutual aid associations, including the Public Officials Benefit Association, the Korea Local Finance Association, the Police Mutual Aid Association and the Korean Teachers’ Credit Union.

The MMAA’s return on assets from 2017 to 2019 reached 20.3 percent on average, whereas the average ROA for the others was below 13 percent.

POBA and the KLFA posted 12.73 percent and 12.32 percent, respectively, during the three years while the fund operator for the police marked 11.29 percent.

The MMAA earned 1.42 trillion won in operating profit in 2017, 1.41 trillion won in 2018 and 1.04 trillion won in 2019. Last year it attained a profit rate of 12.4 percent for its stock investments, making stocks its most profitable investment assets, outperforming bonds and real estate.

By investing in bonds, the fund operator for military personnel achieved a profit rate of 9 percent last year, up from 5.4 percent in 2017. Its profit rate for alternative investments increased to 6.8 percent, up from 1.6 percent in 2017.

Some project financing funds that the organization liquidated in 2018 contributed to the profit growth. It also sold two real estate properties last year worth a combined 550 billion won.

POBA invested some 2 trillion won in stocks, and its rate of return for stock investment came in at 19.7 percent. For bonds and alternative investments, respectively, the rates of return came in at 8.9 percent and 7.5 percent. The KLFA also achieved a high rate of return on its stock investment, 15.11 percent.

By Kim Young-won (