With the domestic stock market surging and the exchange rate swinging, the National Pension Service will unusually convene a fund management committee meeting in January. The National Pension Service plans to review its portfolio overall.
According to the National Pension Service and the financial investment industry on the 19th, the Ministry of Health and Welfare plans to hold the first fund committee meeting of the year on the 26th.
The fund committee is a body that deliberates and decides important matters of pension fund management. Holding a fund committee meeting in January is the first time in five years. Typically, the fund committee has met around February to March.
As domestic stocks and the exchange rate have surged, increasing overall market volatility, the aim is to review the National Pension Service's portfolio comprehensively.
The National Pension Service said the specific agenda has not been set, but it is widely expected to discuss strategies related to raising the domestic equity weight and the rise in the exchange rate.
This year's domestic equity target weight for the National Pension Service is 14.4%. As of Oct. last year, the National Pension Service's domestic equity investment weight was 17.9%, effectively reaching the upper bound of its strategic asset allocation (SAA) range. With the KOSPI index surging close to 5,000 this year, a situation could arise in which it would have no choice but to sell domestic stocks.
President Lee Jae-myung said during the Ministry of Health and Welfare's year-end work briefing last year, "Recently, as domestic stock prices have risen, the National Pension Service has exceeded its (domestic) equity holding limit; do we have to keep selling this?" He added, "It is cautious and risky to talk about the stock market, but the National Pension Service should also deliberate a lot." The remarks are interpreted as referring to expanding the domestic equity investment weight.
Kim Sung-joo, chair of the National Pension Service (NPS), said at the time, "We are trying to change the investment guideline criteria to respond quickly to the situation," adding, "It seems we can convene the fund committee early next year."
As the won-dollar exchange rate has risen again to near the 1,480-won level, the likelihood has grown that the fund committee this month will take up exchange rate-related agenda items. Late last year, when the won-dollar rate climbed into the 1,480-won range, the National Pension Service activated both strategic and tactical currency hedges.