National Pension Service to Increase Domestic Equity Investment Ratio from 14.4% to 14.9%

Portfolio Reviewed and Improved at Committee Meeting
Target Allocation for Overseas Equities Adjusted from 38.9% to 37.2%
Temporary Suspension of Asset Allocation Rebalancing

The National Pension Service has decided to increase its domestic equity investment ratio this year from 14.4% to 14.9%.

On January 26, the National Pension Fund Management Committee held its first meeting of 2026 at the Government Complex Seoul, where it reviewed and approved the "Improvement Plan for the National Pension Fund Portfolio" containing these changes.

Increasing Target Allocation for Domestic Equities, Reducing Overseas Equities

Jeong Eun-kyung, Minister of Health and Welfare, is attending and speaking at the 1st National Pension Fund Management Committee meeting of 2026 held on the 26th at the Government Complex Seoul in Jongno-gu, Seoul.

The Committee decided to revise this year’s planned target portfolio, taking into account the increased burden of foreign exchange procurement due to the fund’s growth and changes in the foreign exchange market environment.

Accordingly, the National Pension Service’s target allocation for domestic equities will be expanded by 0.5 percentage points, from the originally planned 14.4% to 14.9%.

Previously, the National Pension Service had planned to reduce its domestic equity allocation by 0.5 percentage points annually, lowering it to 13% by the end of 2029. However, contrary to the original plan, the allocation will remain at 14.9% in 2026, the same as the previous year (2025).

This year’s target allocation for overseas equities will be adjusted from the originally planned 38.9% to 37.2%.

The Committee explained, “We decided to revise the 2026 target portfolio in the fund management plan, considering the increased foreign exchange procurement burden due to the fund’s expansion and the recent demand-driven environment in the foreign exchange market. This decision takes into account the impact on fund returns and the existing fund management direction.”

Temporary Suspension of 'Rebalancing' When Asset Class Targets Deviate

Jeong Eun-kyung, Minister of Health and Welfare, is attending and speaking at the 1st National Pension Fund Management Committee meeting of 2026 held on the 26th at the Government Complex Seoul in Jongno-gu, Seoul.

Additionally, the Committee will temporarily suspend ‘rebalancing,’ the process of adjusting asset class allocations to keep them within the permitted range when they deviate from targets.

The National Pension Service invests its fund in a variety of assets, including domestic and overseas stocks and bonds, as well as real estate. The overall portfolio sets target allocations for each asset class, along with permissible deviation ranges to account for market fluctuations.

This decision was made based on concerns that, given the recent increase in the domestic equity allocation above its target and high market volatility, frequent rebalancing could have an excessive impact on the market.

The Committee stated, “Due to strong fund performance in recent years, the fund has grown rapidly, amplifying the market impact of rebalancing. In addition, the domestic stock and foreign exchange markets have experienced significant short-term changes, making it difficult to clearly assess market conditions and determine appropriate strategic asset allocation ranges.”

The Committee will continue to regularly review and, if necessary, adjust the permissible deviation ranges going forward.

Minister of Health and Welfare Jeong Eun-kyung said, “The National Pension Service has achieved record-breaking performance for three consecutive years since 2023, resulting in a significant increase in fund size and greater market impact. It is now time to carefully review the situation. While operating the fund to enhance returns in line with the goal of securing retirement income for the public, we will also manage its impact on the market.”

Meanwhile, the Fund Management Committee is the highest decision-making body that reviews and approves major matters related to the management of the National Pension Fund. The committee is chaired by the Minister of Health and Welfare and includes officials from relevant ministries, as well as representatives of employers, employees, and regional subscribers.

Typically, the first meeting of the year is held in February or March to review the previous year’s settlement, but this year, the meeting was unusually convened in January before the settlement was completed. This is the first time in five years, since 2021, that such an early meeting has been held.