National Pension Service (NPS) of South Korea, the world’s third-largest pension fund, posted a 9.71% investment return for the first half of this year as of August 31, according to its preliminary report on Friday.
As of the first half, the fund’s valuation stood at 1,147 trillion won ($858.7 billion), and the cumulative income since the fund’s establishment is 680.4 trillion won ($509.3 billion).
The provisional returns by asset type for the first half were as follows: overseas stocks 20.47%, domestic stocks 8.61%, overseas bonds 7.95%, alternative investments 7.79%, and domestic bonds 1.66%.
“In the first half of this year, the strong performance of US tech stocks led to favorable returns for domestic and international stocks,” the fund management department explained. “The rise in the won-dollar exchange rate positively impacted the returns on overseas assets.”
Despite concerns about US inflation, increased demand and expectations for artificial intelligence (AI) led to rising stock prices, particularly among large tech companies, according to the fund management department.
It reported that overseas stocks achieved returns of over 20% due to the weakening of the won against the dollar. The returns on overseas bonds also improved with the continued rise in the won-dollar exchange rate.
The returns on alternative investments, including real estate, private venture capital, and infrastructure investments, were attributed to interest and dividend income foreign exchange gains due to the won-dollar exchange rate increase, without reflecting changes in the valuation of investment assets.
The evaluation of alternative investment assets will be conducted later at the end of the year.
By Jung-hwan Hwang
jung@hankyung.com
