The Korea Investment Corp. (KIC) posted a 11.73% return on investments as of the end of September, buoyed by a sustained rally in US technology stocks, according to investment banking sources on Friday.
The return is close to its record annual gain of 13.7% in 2020, raising expectations of the sovereign wealth fund delivering its highest annual return since inception.
Its assets under management stood at $227.6 billion, up $21.1 billion from the end of last year. Since its establishment in 2005, KIC has generated cumulative investment gains of $118 billion.
Traditional assets accounted for $178 billion, or 78.2%, of the portfolio, with alternative investments making up the remaining $49.6 billion (21.8%).
Within traditional assets, equities represented $94.6 billion and bonds $73.2 billion. Over the past few years, KIC has steadily increased its exposure to growth stocks.
Alternatives included private equity ($17.2 billion), real estate ($11.2 billion), infrastructure ($10.2 billion), hedge funds ($5.8 billion) and private credit ($4.4 billion).
The traditional assets returned 12.96%, outperforming its benchmark by 24 basis points. Equities gained 18.74%, 15 basis points ahead of the benchmark, while bonds rose 6.72%, outperforming by 45 basis points.
Its alternative investments have delivered an annualized return of 8.01% over the past decade, led by private equity at 11.9% and infrastructure at 10.53%.
Hedge funds and real estate generated 5.13% and 3.91%, respectively on an annualized basis.
“KIC could post its best-ever annual return even if performance remains flat in the fourth quarter,” said an investment banker. ”But we also need to closely monitor the potential for increased volatility toward the end of the year.’”
By Gyeong-Jin Min
min@hankyung.com
Yeonhee Kim edited this article.
