As of the end of May, when Korea's stock market was rising, the National Pension Service's domestic stock return since the start of the year hit a "jackpot" at 106%, but the KOSPI's plunge in July is estimated to have wiped out nearly 120 trillion won in paper gains.
On the 5th, according to the "portfolio management status and rate of return by asset class as of May" the National Pension Service Fund Management Center released on the 30th of last month, the National Pension Service's total assets reached 1,848.7020 trillion won at the end of May. That was up 26.8% from the end of last year (1,457.9960 trillion won).
By asset class, domestic stocks delivered the most dominant performance by far. As of the end of May, the valuation of domestic stocks was 543.6350 trillion won, with a year-to-date return of 106.76%.
That figure dwarfs returns in other asset classes over the same period (overseas stocks 16.13%, domestic bonds -2.42%, overseas bonds 5.80%, alternatives 7.70%). Buoyed by this, the National Pension Service's overall portfolio posted a year-to-date return of 26.18%.
However, because the figures are as of May, when the market was climbing steeply, it is estimated that a large part of those paper gains was given back during the sharp downturn in July.
In fact, the KOSPI started in the 6,500 range in early May and surged about 28% to the 8,400 range on May 29. It then broke through the 9,000 level in June to set a new record high, but turned into a crash in July and fell to the 5,500 range.
If the KOSPI's decline through the end of July is mechanically applied to the National Pension Service's domestic stock valuation as of the end of May (543.6350 trillion won), it is estimated at about 423.0125 trillion won. Assuming the National Pension Service's holdings track the KOSPI index exactly, roughly 120 trillion won evaporated in just two months.
The valuations of Samsung Electronics and SK hynix(000660), which have large weights in the National Pension Service's portfolio, also shrank sharply. According to financial data firm FnGuide, as of the 3rd, the National Pension Service's equity valuation in the two stocks was 193.6423 trillion won, down 85.1693 trillion won from the end of June (278.8116 trillion won).
However, with the July market plunge naturally lowering the National Pension Service's domestic stock weight, some analysts said the fund likely saw a self-rebalancing effect. The domestic stock share, which was 29.41% of the total portfolio as of the end of May, is estimated to have fallen to 24.48% based on the end-July valuation (estimated 423.0125 trillion won), a drop of around 5 percentage points (p).