A view of the National Pension Service headquarters in Jeonju, Jeollabuk-do. (Photo: NPS)

The National Pension Fund (NPF) logged an investment return rate of 8.9 percent on the back of 57.4 trillion won in provisional revenues in the first nine months of the year, the National Pension Service Investment Management said.

The NPS had 714.3 trillion won in reserve fund as of the end of September, an increase 75.5 trillion won over the end of the previous year.

As of the end of September, evaluation amounts of assets stood at 713 trillion, accounting for 99.8 percent of the reserve fund. The annualized average investment return rate stood at 5.61 percent since the inception of the fund, and provisional cumulative investment return amounted to 351.5 trillion won.

Investment return rates in the assets in the financial sector were 5.08 percent in domestic stocks, 24.1 percent in foreign stocks, 4.27 percent in domestic fixed income, 16.47 percent in foreign fixed income, and 6.87 percent in alternative investment assets, respectively.

Provisional return rate of about 9 percent as of the end of September was attributable to optimistic outlooks over the negotiations of the U.S.-Chinese trade conflicts and a strong domestic equity and rising trends in the Korean currency’s exchange rates against the dollar on the back of global major countries’ currency easing and economic pumping-prime measures.

Domestic equity accounts for 40 percent of the fund’s asset portfolio. Domestic stocks saw return rates rising due to expectation of the improving of the overseas environment and corporate earnings increases, while foreign stocks owned by the fund also saw return rates shooting up due to each central bank’s easing steps and forecasting of economic recovery.

The KOSPI plunged 17.28 percent in 2018, but I rose 1.08 percent in the first nine months of the year.
The fixed income category, accounting for half of the financial sector’s assets, came strong, influenced by the U.S, Federal Reserve’s twice base money rate cuts and other major countries’ fiscal easing.

Rising trends in the Korean won’s exchange rates against the dollar also contributed to the improving of the fund’s performance.

Provisional yearly return rate of alternative investments, mostly coming from interest, dividend income, and foreign currency difference income of current fluctuations, were not reflected in the fair evaluation of the investment assets. The value evaluation of the alternative investments.

NPF Designates 5 Venture Fund Managers

The National Pension Fund (NPF) has designated five financial institutes in Korea as managers to manage domestic venture funds.

They are Cabinet Investment Partners. Premier Partners, IMM Investment, K2 Investment, and SV Investment. The fund plans to appropriate less than 200 billion won to the five designated venture managers.