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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Seoul, August 28, 2025 — South Korea’s National Pension Service (NPS) recorded a provisional investment return of 4.08% in the first half of 2025, supported by a strong domestic stock market, the fund management division announced on August 28.
As of the end of June, the NPS fund stood at KRW 1,269 trillion, up KRW 56 trillion from the end of 2024. Of this increase, KRW 50 trillion came from investment income, bringing cumulative earnings since the system’s inception in 1988 to KRW 787.5 trillion.
Domestic equities were the standout performer, delivering a return of 31.34% in H1 2025, buoyed by investor optimism over new government policies and favorable supply-demand conditions. The KOSPI rose 28.01% during the same period. Domestic bonds also posted stable gains of 2.34%.
Overseas assets, however, showed mixed results. Foreign equities achieved a modest 1.03% return as U.S. tariff uncertainties and growth concerns early in the year eased later on. In contrast, foreign bonds posted a –5.13% loss, weighed down by the depreciation of the U.S. dollar against the Korean won. Alternative investments also declined by –2.86%, largely due to interest and dividend income fluctuations and currency effects, although NPS clarified that fair-value assessments were not reflected in the reported figure.
The pension fund also highlighted its strong performance in the previous year. As of end-2024, the fund stood at KRW 1,213 trillion, with annual investment income of KRW 160 trillion and a record return of 15.00%. Since inception, NPS has delivered an average annual return of 6.82%, with cumulative investment income totaling KRW 738 trillion.
By asset class in 2024, overseas equities gained 34.32%, overseas bonds 17.14%, alternatives 17.09%, and domestic bonds 5.27%. Domestic equities underperformed at –6.94%, dragged down by concerns over large-cap tech earnings and political uncertainties, as the KOSPI fell 9.63% from end-2023.
알파경제 Paul Lee 특파원(hoondork1977@alphabiz.co.kr)
