National Pension Service Recovers 'Positive' Returns in First Half Despite COVID-19 Impact

Achieved 0.5% Return in First Half of Year Through Diversified Investment and Risk Management

[Asia Economy Reporter Minji Lee] The National Pension Service Fund Management Headquarters announced on the 28th that it achieved a 0.5% rate of return in the first half of the year despite the crisis caused by the novel coronavirus infection (COVID-19).

The National Pension Service stated, "This year, domestic and international financial markets suffered unprecedented shocks due to the global spread and prolonged concerns of COVID-19," adding, "Although the National Pension Service also showed negative returns, thanks to diversified investments and risk management, the rate of return recovered to positive as of the end of June."

In the first quarter, domestic and international stock markets experienced a decline of over -30% compared to the beginning of the year, due to restrictions on movement between countries and regions, contraction of corporate activities, and a sharp drop in oil prices. During this period, the National Pension Service recorded a rate of return of -6.08%.

However, as major global countries implemented stimulus measures and monetary easing policies, domestic and international stock markets showed signs of recovery, leading to an upward trend in stock asset returns. Influenced by interest rate cuts in major countries, bond valuation gains increased, resulting in higher bond returns. Accordingly, in the first half of the year, the National Pension Service recorded returns by asset class as follows: domestic stocks -2.41%, foreign stocks -3.46%, domestic bonds 2.13%, foreign bonds 7.90%, and alternative investments 4.24%. Alternative investment assets' fair value appraisal did not reflect interest and dividend income or foreign exchange gains from the rise in the won-dollar exchange rate.

In the first half of the year, the National Pension Fund reserves increased by KRW 15.5 trillion compared to the previous year, reaching KRW 752.2 trillion. Since the establishment of the National Pension Fund, cumulative earnings have totaled KRW 371.2 trillion, with an average annual cumulative return of 5.30%, demonstrating stable returns as a long-term investor. The National Pension Service explained, "We will thoroughly manage the fund with a long-term perspective to contribute to securing the public's retirement."

This content was produced with the assistance of AI translation services.