With the domestic stock market surging and the exchange rate swinging, the National Pension Service will hold an unusual January fund management committee meeting. 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 deliberates and decides on key matters of pension fund management. It is the first time in five years that the committee will meet in January. Typically, the committee has met around February to March.
As domestic stocks and the exchange rate have jumped, increasing overall market volatility, the plan is to review the National Pension Service's portfolio in full.
The National Pension Service said specific agenda items have not been set, but it is widely expected to discuss strategies related to increasing the share of domestic stocks and the rise in the exchange rate.
This year's target allocation for domestic stocks at the National Pension Service is 14.4%. As of Oct. last year, its domestic stock allocation was 17.9%, effectively reaching the upper end of its strategic asset allocation (SAA) band. With the KOSPI index surging close to 5,000 this year, it could be forced to sell domestic stocks.
President Lee Jae-myung said at the Ministry of Health and Welfare's year-end briefing, "As domestic stock prices have recently risen, the National Pension Service has exceeded its (domestic) stock holding limit. Do we have to keep selling?" adding, "It's cautious and risky to speak about the stock market, but it seems the National Pension Service also has a lot to consider." The remarks have been interpreted as referring to expanding the domestic stock allocation.
Kim Sung-joo, chair of the National Pension Service (NPS), said at the time, "We are trying to change investment guideline standards to respond quickly to the situation," adding, "It seems we can hold a fund committee meeting next year."
With the won-dollar exchange rate climbing again to near the 1,480-won level, the likelihood has grown that exchange rate-related items will be discussed at this month's fund committee meeting. Late last year, when the won-dollar rate rose into the 1,480-won range, the National Pension Service activated both its strategic and tactical currency hedges.