As of November last year, the National Pension Fund’s (NPS) rate of return approached double digits. Despite concerns about a global economic downturn, the strength of the stock market resulted in the evaluation of the fund’s assets surging to nearly 1 quadrillion won.
The NPS Investment Management disclosed on Jan. 29 that the cumulative rate of return for the fund until November last year stood at 9.88 percent. This figure represents a notable increase from the cumulative return of 6.75 percent recorded until October.
The NPS explained, “The domestic and international stock markets showed strength due to the global trend of monetary easing and a preference for risk assets driven by solid corporate performance. The favorable exchange rate also contributed to achieving a sound rate of return in fund management.”
The significant increase in returns is primarily attributed to the overseas equity sector. Breaking down by asset class, the returns are as follows: 16.50 percent for domestic stocks, 17.76 percent for overseas stocks, 4.76 percent for domestic bonds, 5.71 percent for overseas bonds, and 4.90 percent for alternative investments.
In the stock sector, the ongoing improvement in corporate performance had a significant impact on the continued bullish trend. Bonds showed favorable returns as expectations grew that the Federal Reserve would end its tightening measures towards the end of last year. The returns on alternative investment assets were largely driven by interest and dividend yields, along with the rise in the won-dollar exchange rate.
As of November last year, the total assets of the NPS were on the brink of reaching 1 quadrillion won, standing at 999.24 trillion won (US$751.13 billion). This represents an increase of 30.95 trillion won compared to the previous month’s valuation of 968.3 trillion won.
Meanwhile, the NPS announced on Jan. 5 that it achieved a provisional rate of return exceeding 12 percent last year, marking the highest in its history since the establishment of the NPS Investment Management within the organization. Additionally, annual profits surpassed 100 trillion won for the first time, contributing to the tentative calculation that the overall reserve fund size has exceeded 1,000 trillion won. The exact rate of return for the NPS in the past year will be officially disclosed after the final calculation is completed in March.