Korea’s NPS investment rate averages 10-year high of 11% in 2019

2020.02.11 13:44:15 | 2020.02.11 15:32:45

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South Korea’s state pension fund National Pension Service (NPS) performed its best in managing the world’s third largest assets in a decade with an average return rate of 11 percent, thanks to strong U.S. stock market and currency value.

NPS managing assets worth 723.9 trillion won ($610.5 billion) as of late November said Tuesday its investment return is estimated to have averaged 11 percent in 2019, reversing from minus 0.92 percent a year ago.

It benefited from jump in U.S. assets and currency value due to strong economy.

NPS reported an average annual return of minus 0.92 percent in 2018, its first negative since the financial meltdown in 2008 in line with other pension funds worldwide due to high risk aversion.

Japan’s Government Pension Investment Fund delivered a negative yield of 7.7 percent, U.S. California Public Employees` Retirement System (CalPERS) minus 3.5 percent, and Netherlands’ Stichting Pensioenfonds ABP minus 2.3 percent.

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Before the year, NPS’s investment yield reached 10.37 percent in 2010 (with 30.1 trillion won in return), 2.31 percent in 2011 (with 7.7 trillion won), 6.99 percent in 2012 (with 25 trillion won), 4.19 percent in 2013 (with 16.7 trillion won), 5.25 percent in 2014 (with 23 trillion won), 4.57 percent in 2015 (with 21.7 trillion won), 4.75 percent in 2016 (with 24.5 trillion won), and 7.26 percent in 2017 (with 41.2 trillion).

NPS’s cumulative yearly return until the end of November last year came at 5.7 percent, generating 357 trillion won in cumulative return since its inception in 1988.

With its AUM estimated to reach 177.8 trillion won by 2041, NPS is planning to focus on diversifying its investment portfolio and strengthen preemptive risk management.

By Lee Ha-yeon

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