State pension fund's return shifts to negative on virus

SEOUL, April 29 (Yonhap) -- South Korea's state pension fund has posted a negative return this year as the coronavirus pandemic pommeled shares at home and abroad, its operator said Wednesday.

The fund registered a preliminary return rate of minus 0.45 percent as of the end of February, according to the National Pension Service (NPS).

It represents a sharp turnaround from a record yield of 11.3 percent last year. The NPS didn't provide the amount of its valuation loss.

The pension operator blamed slumping domestic and overseas stock markets for the negative return.

"The domestic equity market remained weak on concerns over an economic slowdown due to a jump in coronavirus infections," the NPS said. "Overseas stock markets also ended February lower amid risk aversion stemming from the coronavirus pandemic."

The pension fund chalked off a return rate of minus 7.75 percent on domestic stocks and minus 2.95 percent on overseas equities.

In contrast, its return on domestic bonds stood at 2.06 percent, with returns at 7.85 percent on foreign bonds and 3.68 percent on alternative investments.

The NPS, which set a crisis response team in motion in February, said it will keep close tabs on financial market trends and flexibly cope with changes in an effort to boost its long-term returns.

The NPS is one of the world's leading pension funds, with assets under its management nearing 724 trillion won (US$594 billion) as of end-November.

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