The National Pension Service (NPS) of South Korea has announced a record-breaking investment return of 15% for the year 2024, generating a profit of over 160 trillion won. This marks the highest annual return since the fund's inception in 1988 and the second consecutive year of record-breaking performance.
According to the NPS Fund Management Headquarters, the total assets under management reached 1,213 trillion won by the end of 2024, with a profit of 160 trillion won and a provisional return of 15.00%. This outstanding performance has brought the fund's average annual return since its establishment to 6.82%, with cumulative investment profits totaling 738 trillion won.
The strong performance was driven by robust returns in overseas equities, which saw a 34.32% increase, followed by overseas bonds at 17.14%, alternative investments at 17.09%, and domestic bonds at 5.27%. Domestic equities were the only asset class to experience a negative return, with a decrease of 6.94%.
Overseas equities benefited from expectations of interest rate cuts by the U.S. Federal Reserve and the strong performance of technology stocks. Overseas bonds also delivered double-digit returns, driven by favorable interest income and the appreciation of the U.S. dollar against the Korean won. Domestic bonds saw gains due to the Bank of Korea's interest rate cuts, which led to an increase in bond prices.
In contrast, domestic equities struggled due to concerns over the performance of major technology companies and political uncertainties. Alternative investments, which include real estate and private equity, benefited from the increase in asset valuations and realized gains.
NPS Chairman Kim Tae-hyun attributed the fund's strong performance to its diversified portfolio, strategic partnerships with global asset managers, and continuous improvement of its investment infrastructure. He pledged to further enhance the fund's investment capabilities through the introduction of a benchmark portfolio, the launch of a next-generation overseas investment system, and the recruitment of international experts.
The final performance evaluation of the NPS fund will be confirmed by the Fund Management Committee in late June, following a review by the Risk Management and Performance Compensation Committee.
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