SEOUL : South Korea’s national pension fund will continue to raise the ratio of risky assets and increase alternative investments, the welfare ministry said on Friday.
The ministry announced this in a statement after an annual review of five-year portfolio management plans, at which it kept target ratios for each asset class and target investment returns, unchanged from the previous year.
By end-2029, the National Pension Service (NPS) will allocate 55 per cent of its total assets to stocks, 30 per cent to bonds, and 15 per cent to alternative investments, with the investment earnings target for the next five years set at 5.4 per cent, according to the ministry.
“Asset allocation targets are determined with the aim of maximising long-term earnings within the given risk limit and in consideration of market impact from the fund management,” the ministry said.
Earlier this month, the board governing the NPS’s investment strategies introduced a new long-term rule of investing 65 per cent of total funds in risky assets.
The world’s third-largest pension fund has been increasing investments in risky and overseas assets for higher returns to delay the depletion of the fund, currently expected in 2055 due to a fast-ageing population.
By end-2025, the NPS plans to hold 14.9 per cent of its assets in domestic stocks, 35.9 per cent in foreign stocks, 26.5 per cent in domestic bonds, 8.0 per cent in foreign bonds and 14.7 per cent in alternative assets.
The NPS held a total of 1,101.3 trillion won ($794.65 billion) in assets as of the end of March, with 47.5 per cent of the total in stocks, 36.7 per cent in bonds and 15.8 per cent in non-traditional assets.
($1 = 1,385.8900 won)