KIC Posts Nearly 14% Return Last Year, Profit Surpasses Principal for First Time

AUM Hits All-Time High...Up 42 Trillion Won in One Year
Cumulative Profit Reaches 12.24 Billion Dollars...Surpasses Principal for the First Time
Solid Returns in Both Equities and Bonds...Alternative Assets Also on Track

Korea Investment Corporation (KIC), the country's only sovereign wealth fund, recorded a solid investment return of close to 14% last year, with cumulative investment gains surpassing the entrusted principal for the first time.

KIC announced on the 23rd that its annual rate of return for last year was 13.91%. This significantly outperformed the 8.49% annual return in 2024. It was the fourth-highest return on record, following 17.55% in 2009, 16.4% in 2017, and 15.4% in 2019. The annualized return over the past 10 years, a key indicator of long-term performance, was calculated at 7.07%.

Total assets under management (AUM) reached a record high of 232 billion dollars, up 28.5 billion dollars (approximately 42.0086 trillion won) from the previous year. Since its establishment in 2005, cumulative net profit has reached 122.4 billion dollars, exceeding the entrusted principal of 118.6 billion dollars for the first time. KIC has invested all of the foreign currency entrusted by the government and the Bank of Korea overseas.

By asset class, the portfolio consisted of 78.1% traditional assets (equities and bonds) and 21.9% alternative assets (private equity, real estate, infrastructure, hedge funds, etc.).

By asset group, traditional assets delivered a return of 15.1%. In particular, equities achieved a return of 22.24%, far outpacing the 7.46% return on bonds. A KIC representative said, "For equities, our strategy of focusing on growth sectors and our capability to identify individual stocks with high potential proved effective, enabling us to outperform the benchmark by 16 basis points (bp, 1 bp = 0.01%)," adding, "Growth in the materials and financial sectors was especially notable, and our strategy of increasing exposure to market-leading stocks supported performance."

Although the absolute return on bonds was lower than that of equities, bonds generated 47 bp of excess return relative to the benchmark. A KIC official explained, "This was the result of accurately anticipating and responding to the term structure and movements of interest rates by currency," and analyzed that "strategies such as shortening duration to defend against price declines in major countries' bonds were effective."

Alternative assets posted an annualized return of 8.48% over the past 10 years. Because alternative investments are made from a long-term perspective, performance is evaluated based on annualized returns over the investment period rather than on a single-year return.

Among alternative assets, private equity recorded the highest 10-year annualized return at 12.87%, followed by infrastructure at 10.91%, hedge funds at 5.47%, and real estate at 3.94%. As interest rates have been stabilizing since the second half of last year, overall conditions have become favorable for management: private equity has benefited from a recovery in corporate fundamentals, private debt from the establishment of a basis for loan recovery, and real estate from a rebound in transactions.

KIC President Park Ilyoung said, "As volatility in financial markets is expected to continue this year, we will focus on strengthening portfolio stability and resilience from a long-term perspective, without being swayed by short-term market conditions," and emphasized, "In particular, we will successfully establish this year the Total Portfolio Approach (TPA), an integrated portfolio management system that allows for more flexible asset allocation and responses, thereby laying the foundation for long-term and sustainable profit generation."