National Pension Fund Increased by 39 Trillion Won in Q1 (Update)

[Asia Economy Reporter Park Soyeon] The National Pension Service Fund Management Headquarters announced on the 28th that as of the end of the first quarter of 2021, the National Pension Fund reserves increased by 38.8 trillion KRW compared to the end of the previous year, totaling 872.5 trillion KRW (provisional), and the rate of return during the first quarter was 3.94% (provisional).

Since the establishment of the National Pension Fund in 1988, the cumulative operating profit as of the end of March 2021 was recorded at 472.3 trillion KRW (provisional).

A National Pension official stated, "Although the COVID-19 pandemic has continued for over a year, the global economy has shown signs of recovery in various areas by overcoming the shock," adding, "In particular, with the progress of vaccination and the maintenance of strong fiscal stimulus measures by each country, global stock markets showed an upward trend during the first quarter."

However, there are differences in the recovery phases by country, and concerns about inflation and pressure from rising interest rates continue to keep caution over risk assets.

By asset class, stocks showed favorable returns both domestically and internationally due to the stock market rise, while bonds recorded negative returns due to valuation losses caused by rising interest rates.

Stocks achieved returns of around 9% both domestically and overseas as expectations for economic improvement increased with the global distribution of vaccines and additional economic stimulus measures, leading to rises in both domestic and global stock markets.

In the case of bonds, returns were negative due to rising interest rates driven by expectations of economic recovery and inflation concerns. However, foreign bonds recorded a KRW-denominated return of about 1.6% due to increased foreign currency translation gains from the rise in the USD-KRW exchange rate.

The annual return for alternative investment assets is mostly a provisional figure reflecting only interest and dividend income. Fair value evaluation of alternative investment assets is conducted once a year at the end of the year. The final annual return can be confirmed through the annual performance evaluation resolved by the end of June the following year.

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