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Press Release

NPF Reached KRW 675.3 trillion in Total AUM at the First Quarter

  • Date : 2019-05-31
  • Hit : 947

NPF Reached KRW 675.3 trillion in Total AUM at the First Quarter
- a preliminary 4.83% in investment return and KRW 324.7 trillion in cumulative investment income at the end of March, 2019 -

□ The National Pension Service Investment Management (NPSIM) which manages the National Pension Fund (NPF) in accordance with the Act of the National Pension, today announced that the NPF reached KRW 675.3 trillion in the total asset under management, an increase of KRW 36.5 trillion from a year earlier, at the end of March, 2019. And it delivered a preliminary 4.83% in return on investments in the first quarter of this year, and a preliminary 5.19% in annualized return since the inception of the fund in 1988.

○ As of the first quarter, its financial investment represented KRW 674.3 trillion or 99.8% of the total AUM while the cumulative investment income since the inception was recorded at a preliminary KRW 324.7 trillion.

○ By asset class, the financial investment posted a preliminary investment return of 7.12% in domestic equities, 14.08% in global equities, 12.7% in domestic fixed income, 4.76% in global fixed income and 1.94% in alternatives.

□ The return of the NPF for the quarter was largely driven by a turnaround in market conditions. In the previous year the global financial market was weakened by trade conflict among major economies, monetary tightening and other adverse conditions, which resulted in having a negative impact on investment returns. Entering this year, however, there have been a higher expectation that the trade tension between the U.S. and China would be eased off and a slow-down of the U.S. Fed’s monetary tightening policy, which helped the global stock market recover.

○ With a high hope for the U.S.-China trade talks and monetary easing in major economies, the global stock market has rebounded and boosted the investment return of domestic and global equities to around 7% and around 14%, respectively, which eventually enhanced the investment performance of the total portfolios.

* Domestic stock market (KOSPI) fell 17.28% in 2018 and rose 4.88% for Q1 2019.
* Global stock market (MSCI ACWI ex-Korea, USD) fell 9.20% in 2018 and rose 12.30% for the first quarter of 2019.

○ Over the quarter, the fixed income investment representing over 50% of the entire assets has been bolstered, largely driven by a slow-down of the monetary tightening and concern over weaker global economy. Therefore, the investment in fixed income assets has generated an investment return of around 1% for domestic fixed income and around 4% for global fixed income with higher valuation from a decline in the interest rate and Korean currency depreciation against the U.S. dollar.

* Fixed income: Korean Treasuries (3-year) fell 13.3bp and US Treasuries (10-year) fell 27.9bp for Q1 2019.
* FX: The KRW-USD exchange rate increased 1.76% for Q1 2019.

○ Meanwhile, the return of the alternative investment during the year has mostly derived from dividend and interest incomes, not including fair valuations. A full year return after fair valuations will be released next year.

<Appendix> 1. Overview of National Pension Fund for Q1 2019

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