SEOUL, May 31 (Reuters) – 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% of its total assets to stocks, 30% to bonds, and
15% to alternative investments, with the investment earnings
target for the next five years set at 5.4%, 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% 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% of its assets
in domestic stocks, 35.9% in foreign stocks, 26.5% in domestic
bonds, 8.0% in foreign bonds and 14.7% 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% of the
total in stocks, 36.7% in bonds and 15.8% in non-traditional
assets.
($1 = 1,385.8900 won)
(Reporting by Jihoon Lee; Editing by Jacqueline Wong and Sharon
Singleton)