National Pension Service "Fund Operation Yield 8.66% from January to September This Year"

Expectations for Easing Tightening and Preference for Risk Assets... Financial Market Rally
Cumulative Operating Profit of 531.7 Trillion Won

The National Pension Service Fund Management Headquarters announced on the 29th that the National Pension Fund's rate of return from January to September this year recorded 8.66% (provisional).

During this period, the earnings amounted to 80.383 trillion KRW, the cumulative operating earnings since the fund's establishment reached 531.667 trillion KRW, and the fund valuation was 984.161 trillion KRW. The domestic and international stock markets were strong due to easing monetary tightening and a preference for risk assets driven by solid corporate earnings, and the exchange rate also rose.

Looking at the rate of return by asset class (based on amount-weighted returns), domestic stocks recorded 13.43%, foreign stocks 16.07%, domestic bonds 2.54%, foreign bonds 7.25%, and alternative investments 7.39%. Although rising U.S. Treasury yields and oil price pressures were sources of instability in the stock market, favorable returns were recorded due to a preference for risk assets supported by strong individual corporate earnings.

Domestic and foreign bonds experienced fluctuations amid coexistence of expectations for easing monetary tightening and concerns over prolonged high interest rate trends, influenced by U.S. inflation indicators (CPI·PPI) trends and policy-related remarks from the Federal Reserve (Fed).

The rate of return on alternative investments does not reflect the fair value appraisal. Most of it consists of interest and dividend income and foreign exchange gains from the KRW-USD exchange rate increase. Valuation of alternative investment assets will be conducted at the end of the year.

The rate of return for September this year showed some adjustment compared to 6.35% at the end of March and 9.09% at the end of June, due to the continued U.S. interest rate hike stance. However, the recent rate of return was better than that at the end of June.