South Korea’s National Pension Service (NPS) raked in near 5-percent returns on its asset management in the first quarter.
The fund logged a return rate of 7.12 percent in domestic stocks, 14.08 percent in overseas stocks, 1.27 percent in domestic bonds, 4.76 percent in overseas bonds, and 1.94 percent in alternative assets for an average 4.83 percent in total investments.
The world’s third largest pension fund said it had 675.3 trillion won ($568 billion) in reserve funds as of the end of March, adding 36.5 trillion won from three months ago. It has 674.3 trillion won or 99.8 percent invested in financial products. Its cumulative returns since its founding in 1988 through March 2019 totaled 324.7 trillion won with the annual cumulative return rate averaging 5.19 percent.
The truce in U.S.-China trade war and pause in U.S. rate increases boosted markets globally in the first three months of the year. The Korea’s main stock market Kospi gained 4.88 percent in January-March this year and the dollar-denominated MSCI ACWI ex-Korea jumped 12.3 percent over the cited period.
Bonds, which account for more than half of the pension fund’s total investments, also delivered steady returns as global debt market rallied on signs of slowdown in the global economy. Return on investment in overseas bonds reached nearly 5 percent, also benefiting from U.S. dollar strengthening.
Alternative investment delivered profits mostly from dividend income and interest earnings, without fair value reflected in. The pension fund said it will be assessing the value of its assets in alternative investments at the end of this year.
By Chung Seul-gi and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]