The National Pension Service Fund Management Headquarters, a 'big player in the capital market' that manages national retirement funds, recorded its highest fund management revenue level to date in 2022, following 2023. It achieved over 34% revenue from overseas stock markets and more than 17% from overseas bonds and alternative investments, which proved effective. However, the revenue from domestic stocks was poor at -7%. Thanks to excellent operational performance, the fund's reserve exceeded 1,200 trillion won.
The National Pension Service Fund Management Headquarters announced on the 28th that it recorded a provisional investment revenue of 15.00% (value-weighted revenue) as of the end of 2024. The fund reserve is 1,213 trillion won, and the revenue is 160 trillion won. The National Pension Service noted, "This is the highest revenue since the fund was established in 1988," adding, "The average revenue since the fund's establishment is 6.82%."
Looking at the revenue by asset, overseas stocks topped the list at 34.32%. This significantly outpaced the global stock market's (MSCI ACWI ex-Korea, dollar-based) increase of 18.43% during the same period. The National Pension Service explained that the U.S. Federal Reserve's interest rate cuts and a rally in tech stocks contributed to the revenue from overseas stocks. Additionally, the increase in the won-dollar exchange rate, which rose by 14.01% compared to the end of the previous year, aided the revenue from overseas stocks.
The revenue from domestic stocks showed a decline at -6.94%; however, it performed better than the KOSPI index, which dropped -9.63%. The National Pension Service reported, "Concerns over large tech stock performance and political uncertainty led to the negative revenue."
Bond revenues were reported at 5.27% domestically and 17.14% internationally. The National Pension Service explained, "Even amid rising market interest rates, overseas bonds generated healthy interest revenue and benefited from the increase in the won-dollar exchange rate, leading to a double-digit revenue," stating that "domestic bonds rose in price due to two rate cuts by the Monetary Policy Committee of the Bank of Korea in October and November."
Last year, the revenue from alternative investments of the National Pension Service was provisionally calculated at 17.09%. The National Pension Service noted, "The increase in the valuation of assets and realized profits were reflected." It appears that the rise in the won-dollar exchange rate also contributed positively to the revenue.
Since the establishment of the National Pension Fund in 1988, the cumulative revenue generated through fund investments totals 738 trillion won. The average operational revenue from 1988 to the end of December 2024 is 6.82%. The final performance evaluation of the National Pension Fund's management is expected to be confirmed by the Fund Management Committee at the end of June, after a review by the Risk Management and Performance Compensation Expert Committee.
Kim Tae-hyun, chairman of the National Pension Service, said, "The fact that the National Pension Service achieved the best performance for two consecutive years despite fears of an economic slowdown, ongoing geopolitical risks, the U.S. presidential election, and domestic political instability is the result of steadily improving the fund management infrastructure through diversification of domestic and international asset portfolios, strategic partnerships with global management companies, and strengthening the functions of overseas offices."
Chairman Kim added, "In the future, we will further enhance our fund management capabilities through the introduction of a benchmark portfolio, the operation of a next-generation overseas investment integration system, and the hiring of overseas professionals, while thoroughly managing risks to improve fund revenues."