Korea Investment Corporation (KIC), the sovereign wealth fund, has exhibited a return rate in the 7% range from January to the end of August this year. It has successfully recovered approximately 40% of losses incurred in the previous year.
KIC announced on Nov. 29 that the total asset return rate for the year up to the end of August stands at 7.12% pre-fee. It appears that a significant portion, around 40.7%, of the annual loss of US$29.7 billion from the previous year has been recovered.
In detail, the return rates within traditional assets were 15.29% in stock investments and 1.11% in bond investments. The overall return rate for traditional assets is 8.32%.
KIC has not disclosed the annual return rate for alternative investments. However, the annualized return on the overall alternative assets has decreased from 8.23% at the end of last year to 8.06% at the end of August this year, following the initial investment in alternative assets.
During the same period, private equities saw a slight decrease in returns from 9.88% to 9.83%, while real estate and infrastructure experienced a reduction from 7.88% to 7.49%. On the other hand, hedge funds witnessed an increase in returns, rising from 5.31% to 5.38%.
As of the end of August this year, KIC’s total assets amounted to US$181.4 billion, an increase of US$12.1 billion compared to the end of last year. The asset allocation as of the end of August included stocks at 39.6%, bonds at 30.7%, alternative assets at 22.7%, and others at 7.0%.
Previously, KIC recorded its lowest-ever annual total asset return rate of -14.36% last year. Consequently, the cumulative annualized return rate also significantly decreased from 5.47% in 2021 to 4.12% last year. In particular, with an annual return of -19.27%, it recorded a performance 1.37 percentage points below the benchmark, leading to criticisms of its underwhelming operational performance.
Since its establishment in 2005, KIC has been entrusted with managing a total of US$117.1 billion in assets from the Ministry of Economy and Finance, the Bank of Korea, and other entities.