National Pension Service Reports Fund Management Earnings of 67.4 Trillion KRW by Q3... Reserves Reach 919 Trillion KRW (Update)

[Asia Economy Reporter Park So-yeon] The National Pension Service Fund Management Headquarters announced on the 29th that it achieved an operating profit of 67.4 trillion won by the end of the third quarter this year.

It earned 67.3 trillion won in profits from financial sectors such as stocks, bonds, and alternative investments, with the remainder coming from welfare and other sectors. As of the end of the third quarter, the provisional operating return rate for this year was recorded at 8%.

As of the end of the third quarter this year, the National Pension Fund reserves were provisionally estimated at 918.7 trillion won, an increase of 85 trillion won compared to the end of the previous year.

Since the establishment of the National Pension Fund in 1988 until the end of September 2021, the cumulative operating profit was recorded at 507 trillion won.

By asset type, stocks showed favorable returns both domestically and internationally due to the rise in major global stock markets. Domestic bonds suffered losses due to rising interest rates, but overseas bonds showed favorable returns thanks to the rise in the won-dollar exchange rate.

Domestic and overseas stocks recorded favorable returns of 8.23% and 22.66%, respectively, as concerns over tightening due to early interest rate hikes eased amid rising COVID-19 vaccination rates and heightened expectations for economic normalization.

Domestic and overseas bond yields have been rising across all maturities since the beginning of the year due to expectations of economic recovery and concerns over inflation expansion from economic stimulus measures. In September, they surged further due to the anticipated formalization of tapering (asset purchase reduction) by the U.S. Federal Open Market Committee (FOMC).

Due to the increase in valuation losses caused by this, domestic bonds recorded a -1.28% return. On the other hand, overseas bonds recorded a favorable return of 7.60% due to the rise in the won-dollar exchange rate.

Meanwhile, the annual return on alternative investment assets mostly reflects provisional figures based only on interest, dividends, and trading gains and losses. Since the fair value evaluation of alternative investment assets is conducted once a year at the end of the year, the final annual return is confirmed through the annual performance evaluation resolved by the end of June the following year.