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Photo courtesy of Yonhap News |
[Alpha Biz= Ellie Kim] South Korea’s National Pension Service has seen its assets under management rise to KRW 1,800 trillion, driven by strong investment returns amid a stock market rally led by semiconductor shares.
According to financial industry sources and government data on May 14, the fund’s assets increased by more than KRW 340 trillion from KRW 1,458 trillion at the end of last year in just over four months. Excluding contributions such as insurance premiums, the fund generated approximately KRW 300 trillion in investment gains so far this year—surpassing last year’s total return of KRW 231 trillion by about KRW 70 trillion.
The fund’s cumulative return for the year has exceeded 20%, marking an unprecedented performance since its establishment in 1988. Following a record annual return of 18.82% last year, the fund is now on track to set another all-time high, far exceeding the typical 5–8% annual return target for large pension funds.
Domestic equities delivered particularly strong gains, with returns nearing 90%. The rally was fueled by rising expectations for improved semiconductor industry conditions amid expanding artificial intelligence (AI) investments, lifting shares of major chipmakers such as Samsung Electronics and SK Hynix. Strength in export-oriented sectors, including power equipment, defense, and shipbuilding, also contributed.
Overseas equities posted returns exceeding 10%, supported by resilient performance in U.S. technology stocks tied to AI, as well as expectations of interest rate cuts and improving corporate earnings globally. Alternative investments, while facing concerns over some overseas real estate assets, have largely stabilized and have not significantly weighed on overall performance.
With the valuation of domestic equities rising sharply, the fund’s allocation has exceeded its target levels. In line with its investment principles, the National Pension Service is expected to consider rebalancing—reducing overweight assets and increasing exposure to relatively underperforming ones.
The fund’s investment committee is scheduled to review the matter on May 15, with key issues including the pace of adjustment in domestic equity holdings and whether to maintain or raise the upper limit for domestic asset allocation.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
