"Fund Assets Surpass 900 Trillion for the First Time... Committed to Original Intent and Principles"

Ahn Hyo-jun, Head of National Pension Fund Management, Secures Second Term Success

Achieving the 1,000 Trillion KRW Mark Next Year Is Feasible

Recorded Highest Return in 2019

During Economic Uncertainty Like This Year

Reiterates Adherence to 'Investment Principles'

'A Good Working Environment for Fund Managers

Reflects in Fund Performance,' Confident

[Jeonju (Jeonbuk) = Asia Economy Reporter Park So-yeon] The National Pension Service (NPS) has surpassed 900 trillion KRW in fund assets for the first time. Just three years ago, the fund assets were in the 600 trillion KRW range, but in the first half of this year, they exceeded 900 trillion KRW, and it is expected to reach the 1,000 trillion KRW level next year. It is almost certain to join the ‘1,000 Trillion Club’ as the third after Japan’s Government Pension Investment Fund (GPIF) and Norway’s Government Pension Fund (GPF).

On the 25th, at the NPS Happy Pension Hall in Jeonju, An Hyo-jun, Chief Investment Officer (CIO) of the NPS Fund Management Headquarters, emphasized, "I will not lose my original intention and will work hard until the end."

An Hyo-jun recently succeeded in a second term and will serve as the head of the Fund Management Headquarters until October 7 next year. This is the first time since the Fund Management Headquarters was established in 1999 that someone has been reappointed more than once. When An joined the Fund Management Headquarters in October 2018, the fund assets were about 643 trillion KRW. As of the end of the first half of this year, less than three years later, the fund assets reached 908 trillion KRW.

The value of investment assets increased, and pension income flowed in, resulting in a growth of 74.5 trillion KRW in just the first half of this year. The financial sector assets used for active management alone amount to 906.6 trillion KRW. They are composed of domestic stocks at 184 trillion KRW (20.3%), foreign stocks at 234 trillion KRW (25.8%), domestic bonds at 341 trillion KRW (37.6%), foreign bonds at 53 trillion KRW (5.8%), and alternative investments at 95 trillion KRW (10.4%). The financial sector investments in stocks and bonds alone yielded 73.45 trillion KRW.

The NPS’s return in the first half of this year was 7.49%. Although this is lower than last year’s total return of 9.7%, it is higher than the average annual return of 7.19% over the past five years. This was largely due to the significant returns from foreign stocks (17.86%) and domestic stocks (15.27%).

Since his appointment, An has been recognized for his capabilities by achieving high returns. In 2019, he recorded the highest annual return of 11.31% since the establishment of the Fund Management Headquarters. Last year, despite the COVID-19 situation, he achieved a 9.70% return and led the fund to outperform benchmarks across all asset classes for the first time since the headquarters was established.

However, this year, the investment environment has been challenging due to delayed economic recovery and interest rate hikes amid global economic uncertainties. Regarding this, An emphasized once again, "Especially in times like these, we must faithfully adhere to the ‘house view (investment principles)’ we have established."

As of the end of June, the NPS holds about 0.4 percentage points more in domestic stocks and 0.7 percentage points more in domestic bonds than planned. Conversely, alternative investments are about 1.5 percentage points less than planned. The alternative investment ratio stands at 11.9%, which is lower than the year-end target of 13.2% of total assets. In the second half of the year, the NPS is expected to actively increase alternative investments while reducing the proportions of domestic and foreign stocks.

Regarding the new term investment strategy starting this October, called ‘Season 3,’ An said, "Each department is doing very well," and emphasized, "I will trust and delegate to the juniors."

An previously stated, "During the remaining term, I will do my best to create a good working environment for the juniors." He believes that when fund managers have a good working environment, it reflects in the fund’s performance and ultimately benefits the public. He emphasized, "I will dedicate myself wholeheartedly during the remaining period."

Meanwhile, at the fund management meeting held that day, a proposal to lower the delegated management range of foreign bonds from the current 50-90% to 40-80% was approved. As of the end of April, the NPS delegates 53.5% of foreign bonds for management. It is expected that the proportion of direct management of foreign bonds will continue to increase going forward.

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