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National pension fund logs 3.9 pct return as of February

All News 11:30 April 29, 2019

SEOUL, April 29 (Yonhap) -- South Korea's state pension fund posted a healthy return rate of 3.9 percent as of February, recovering from last year's loss, its operator said Monday.

Last year, the national pension fund, the world's third-largest investor with over 667.4 trillion won (US$575.7 billion) in assets under its management, logged a minus 0.9 percent return rate due to unfavorable market conditions such as trade frictions between the United States and China.

The poor performance marked the first time in a decade that the fund's return rate stayed in negative terrain.

In 2008, the fund's investment return rate stood at minus 0.18 percent as economies around the world were rocked by the global financial crisis, and South Korea's key stock index, KOSPI, fell over 17.3 percent from the end of the previous year, the sharpest fall in a decade.

"Stock markets, which continued to perform well in the first two months of 2019, contributed to the better return rate," the National Pension Service (NPS) said.

In the first two months of the year, the country's stock market advanced by some 7.6 percent, with foreign stock markets also delivering decent gains.

The fund's return rate from domestic stock investments stood at some 9.5 percent, and it also enjoyed an 11.4 percent return from its investments in overseas stocks.

The NPS also said the fund racked up 0.2 percent and 1.25 percent returns, respectively, from domestic and foreign bond investments, during the two months amid a low rate trend, with returns from alternative investments reaching 0.5 percent.

The NPS said 99.8 percent or 666.4 trillion won of its funds were invested in financial instruments, with 18 percent of those invested in domestic stocks and 19.2 percent in foreign stocks.

The pension fund also invested some 47 percent of its assets in local bonds, with the corresponding figure for foreign bonds at 4.1 percent.

Since its launch in 1998, the fund's return rate stood at 5.1 percent as of February, having earned some 318.7 trillion won.

The National Pension Service sign atop one of its offices in Seoul (Yonhap)


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