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NPF Reached KRW 697 trillion in Total AUM as of End June of 2019

  • Date : 2019-08-30
  • Hit : 323

NPF Reached KRW 697 trillion in Total AUM as of End June of 2019

- a preliminary 7.19% in investment return and KRW 340 trillion in cumulative investment income as of the end of June, 2019 -

□ The National Pension Service Investment Management (NPSIM), led by CEO Sung Joo, Kim, announced today that the National Pension Fund (NPF) reached a preliminary KRW 696.6 trillion in the total asset under management, an increase of around KRW 57.9 trillion from the end of the previous year as of the end of June, 2019. The NPSIM delivered a preliminary 7.19% investment return since the start of the year, and a preliminary 5.43% annualized return since the inception of the fund in 1988.

○ As of the end of June, the financial investments of the NPSIM represented KRW 695.9 trillion or 99.9% of the total AUM while the cumulative investment income since the inception was recorded at an estimated KRW 340 trillion.

○ By asset class, the financial investments posted an investment return of 6.93% in domestic equities, 19.85% in global equities, 3.00% in domestic fixed income, 9.58% in global fixed income and 4.20% in alternatives.

□ The return of 7.19% that the NPF has delivered for the first half of this year was largely driven by relatively solid stock markets both domestically and globally in an expectation of economic stimulus policies by governments in face of concerns over U.S.-China trade conflict, and a continuous trend of strong US dollar.

○ The domestic and global stock markets displayed a strong performance, affected by new round of trade talks between the U.S. and China and accommodative monetary policies in major economies. Against this backdrop, the equities investment generated an investment return of around 7% for domestic equities and around 20% for global equities.

* Domestic stock market (KOSPI) fell 17.28% in 2018 and rose 4.39% for the period from Jan to June, 2019.
* Global stock market (MSCI ACWI ex-Korea, USD) fell 9.20% in 2018 and rose 16.43% for the period from Jan to June, 2019.

○ The domestic and global bond markets demonstrated a decline in the market interest rate in association with poor global economic indicators and an expectation of lowering policy interest rates at home and abroad. The decline enhanced bond valuations and increased the exchange rate between the South Korean won and US dollar, which contributed to the fixed income investment achieving an investment return of around 3% for domestic fixed income and around 9% for global fixed income.

* Fixed Income: Korean Treasuries (3-year) fell 35.8 bps and US Treasuries (10-year) fell 67.9 bps for the period from Jan to June, 2019.
* FX: The KRW-USD exchange rate increased 3.46% for the period from Jan to June, 2019.

○ Meanwhile, a preliminary mid-year return of the alternative investment has mostly derived from dividend and interest incomes and gains from foreign exchange during the year, which excluded fair valuations. The fair valuation on the alternative assets will be conducted and reflected by the end of this year.

<Appendix> Overview of National Pension Fund as of the end of June, 2019

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