Decline in Domestic Stocks Leads to 5 Trillion KRW Decrease in Profits Compared to Previous Quarter
First Profit Decrease This Year in Q3 Compared to Previous Quarter
Annual Returns 'Red Light'... Likely to Fall Short of Last Year
The National Pension Fund recorded a negative growth rate for the first quarter of this year. Approximately 5 trillion won in earnings disappeared over three months.
The National Pension Fund Management Center announced on the 29th that the rate of return (amount-weighted basis) from January to September 2024 was 9.18%, with operating earnings of 97.2434 trillion won (provisional). Since the introduction of the National Pension system in 1988, cumulative earnings have reached 675.2 trillion won, and a total of 1,146 trillion won in funds have been accumulated.
Compared to the previous quarter, the fund experienced negative growth. Operating earnings from January to June were 102.4 trillion won (rate of return 9.71%), but by the end of September, three months later, it dropped to 97.2434 trillion won (rate of return 9.18%). Annual cumulative earnings decreased by 5.1566 trillion won compared to the second quarter. At the current pace, even if the rate of return improves over the remaining three months, it seems unlikely to surpass last year's record-high rate of return of 14.14%.
The asset class that dragged down the National Pension Fund's rate of return and contributed to the fund's negative growth was domestic stocks. The rate of return for domestic stocks as of the end of September was 0.46%, the lowest among the five major asset classes. Until June, it was 8.61%. The domestic stock market suffered a downturn during the third quarter, causing a sharp decline in returns. In contrast, the rate of return for overseas stocks from the first to third quarter was 21.35%. During the same period, provisional returns for other asset classes were overseas bonds 6.97%, alternative investments 5.05%, and domestic bonds 4.09%.
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