NPS reserve fund tops W900tr in H1

The National Pension Service had a reserve fund of 908.3 trillion won ($777.7 billion) as of end-June, logging a 7.49 percent financial gain over the past six months, a preliminary estimate showed Wednesday.

The world‘s third-largest pension fund has generated 74.5 trillion won in investment returns from January to June, as its stock holdings at home and abroad outperformed their benchmarks.

This beat the earlier projection in 2020 where the NPS assets under management will stand at just over 850 trillion won by the end of 2021.

NPS returned 15.59 percent from its domestic stock investments and 17.73 percent from foreign stocks during the first half. The asset classes beat their respective benchmarks -- Kospi and MSCI ACWI ex-Korea -- according to the NPS Investment Management.

The pension scheme’s foreign bond investment yielded 2.27 percent thanks to a stronger dollar against the Korean won in the first half. This offset the 1.16 percent loss from its domestic bond investment over the cited period. NPS did not estimate the return on alternative investment.

Meanwhile, NPS had its accumulated revenue of 1,157.7 trillion won as of June, while its expenses came to 249.4 trillion won.

NPS also said that at the NPSIM meeting held Wednesday, plans were approved to increase its in-house management portion of global bonds, which stood at 46.7 percent as of end-March. According to the plan, external asset managers will be entrusted with a lower proportion of the total NPS foreign bond allocation, two years after the pension fund greenlighted plans to raise the proportion for external partners.

NPS was working with 16 external fund managers for its foreign bond investments as of June. 

By Son Ji-hyoung (consnow@heraldcorp.com)