Seoul: South Korea's state pension fund announced plans to increase its allocation to domestic equities from 14.4 percent to 14.9 percent this year, responding to shifts in both domestic and international market conditions.
According to Yonhap News Agency, the decision emerged from a meeting of the National Pension Service (NPS) fund management committee. The committee gathered to review the fund's investment strategy, particularly its exposure to local stocks, and to devise strategies to handle volatility in the foreign exchange market.
NPS officials noted that the committee decided to adjust the target portfolio for this year after evaluating foreign exchange market conditions and the challenges of securing foreign currency amid the fund's growing assets. The revised plan includes reducing the target allocation to overseas equities from 38.9 percent to 37.2 percent, while increasing the allocation to domestic bonds from 23.7 percent to 24.9 percent.
The NPS stated that these changes followed a thorough review of their potential impact on fund returns and alignment with its broader investment strategy. Health and Welfare Minister Jeong Eun-kyeong emphasized the importance of reviewing the portfolio, noting the fund's strong performance over the past three years and its increasing influence on financial markets.
Minister Jeong added that the NPS aims to manage the fund effectively to ensure retirement income security for the public, while also improving returns and mitigating its impact on the market. The Korea Composite Stock Price Index (KOSPI) experienced a significant rise of 76 percent last year, closing at 4,214.17 points. This year, the index has maintained its upward trend, remaining above the 5,000-point level since last Thursday, although it has not yet closed a session above this threshold.