The National Pension Service recorded annualized operating returns in the double-digit range for the first half of this year, surpassing all previous records. Analysis indicates that as the domestic stock market surged sharply, it generated over 400 trillion won in just the first six months.
On the 28th, the National Pension Service's Fund Management Division provisionally reported that the overall fund operating return rate as of the end of June this year was 27.22% (amount-weighted return rate). This marks the highest return rate since the establishment of the National Pension Service in 1988. It is 8.4 percentage points higher than the previous record annual return rate of 18.82% recorded last year.
The assessed value of fund assets reached 1,865 trillion 600 billion won as of the end of June. This represents an increase of 401 trillion 400 trillion won within six months compared to the end-of-last-year asset assessment value.
The National Pension Service analyzed that domestic stocks drove the overall return rate, posting triple-digit growth amid reduced uncertainty related to the Middle East conflict and solid performance centered on semiconductors.
Looking at returns by asset class: domestic stocks recorded 107.37%, overseas stocks 17.81%, domestic bonds -3.00%, overseas bonds 9.22%, and alternative investments 9.6%.
Specifically, the assessed value of domestic stocks increased more than twofold from 263 trillion 700 billion won at the end of last year to 543 trillion 200 billion won as of the end of June this year. The assessed value of overseas stocks was reported at 661 trillion 100 billion won. Domestic and overseas stocks together accounted for 64.5% of total fund assets.
Bond returns showed contrasting fortunes between domestic and overseas markets. Rising market interest rates caused bond prices to fall, resulting in a -3% return rate for domestic bonds in the first half of this year, shifting from positive (0.84%) at the end of last year to negative. In contrast, overseas bond returns rose from 3.77% to 9.22% during the same period due to an increase in the won-dollar exchange rate.
Alternative investment returns reached 9.6% in the first half of this year, up 1.57 percentage points from 8.03% at the end of last year. The return rate for alternative investment assets reflected interest and dividend income, foreign currency translation gains or losses due to exchange rate fluctuations, and fair value assessments at the time they became available.
Kim Sung-ju, President of the National Pension Service, stated, "Thanks to favorable trends in both domestic and overseas stock markets during the first half, we were able to achieve stable results." He added, "Although some volatility in returns may occur due to high market volatility in the second half, we are continuing to deliver solid performance." Kim further emphasized, "Going forward, we will do our utmost to ensure long-term and stable returns through rigorous risk management and diversified investments, aiming to achieve strong results again this year."
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