National Pension Service Posts 9.09% Return in Q2... "Recovers Last Year's Losses"

The National Pension Service recovered all of last year's loss of 79.6 trillion won within six months and generated profits.

The Fund Management Headquarters of the National Pension Service announced on the 29th that the rate of return from January to June was 9.09% (provisional).

During this period, the profit amounted to 83.9761 trillion won, the cumulative operating profit since the fund's establishment reached 535.26 trillion won, and the fund valuation was 983.0559 trillion won.

Last year, due to the unusual simultaneous decline in the stock and bond markets, a loss of 79.5518 trillion won was recorded. However, as of the second quarter of this year, all valuation losses were fully recovered, and an additional profit of 4.4243 trillion won was generated.

Despite the global banking crisis and recession concerns at the beginning of this year, both stocks and bonds showed strength due to easing inflation and a slowdown in interest rate hikes, resulting in favorable operating returns.

Looking at the rate of return by asset (based on amount-weighted returns), overseas stocks recorded 17.24%, domestic stocks 17.12%, overseas bonds 6.21%, alternative investments 5.01%, and domestic bonds 2.72%.

Domestic and overseas stocks achieved favorable returns due to risk asset preference supported by the resolution of U.S. debt ceiling concerns and strong economic indicators, despite instability such as the U.S. banking sector crisis.

Domestic and overseas bonds saw limited declines in interest rates due to persistent caution over rate hikes amid expectations of tightening ending, inflation, and easing tightening.

In the case of alternative investments, most of the returns were from interest and dividend income and foreign exchange gains due to the rise in the KRW-USD exchange rate, and the figures do not reflect the fair value evaluation conducted once annually at the end of the year.

Kim Tae-hyun, Director of the National Pension Service, said, “Last year, the economic situation and investment conditions were unfavorable, causing difficulties in management, but as of the end of June this year, we have fully recovered last year’s valuation losses and earned additional profits. The National Pension Service will continue to do its best to increase long-term returns by building a diversified portfolio and securing new investment opportunities.”