NPS Fund Reserves Surpass 1,500 Trillion Won in Q1... Domestic Equities Drive Performance

Domestic Equities Achieve 22% Return
Overseas Equities Lag Behind at -0.11%

The National Pension Service (NPS) recorded an investment return of 4.42% in the first quarter, with the fund’s assets under management surpassing 1,500 trillion won.

On May 29, the Fund Management Headquarters of the National Pension Service announced that, as of the end of March 2026, the NPS fund’s assets under management stood at 1,526 trillion won, an increase of 68 trillion won compared to the end of the previous year. The rate of return was provisionally calculated at 4.42% (money-weighted return).

Compared to major overseas pension funds, these results are considered relatively strong. Norway’s Government Pension Fund Global (GPFG) posted a return of -1.9% for the same period, while the Netherlands’ ABP reported -0.5%. Both funds publicly disclose their performance figures.

Breaking down the NPS returns by asset class: domestic equities yielded 21.67%, overseas equities -0.11%, domestic bonds -2.03%, overseas bonds 4.98%, and alternative investments 5.27%.

Domestic equities were the main driver of the NPS’s overall performance. In fact, the Korean stock market rose by 19.89% compared to the end of last year. On the other hand, returns on overseas equities fell, mainly due to increased uncertainty. The global stock market declined by 5.36% over the same period.

The NPS explained, "Although there was some adjustment in domestic equities—primarily in semiconductor-related stocks—due to deteriorating investor sentiment following the outbreak of the U.S.–Iran war (February 28), double-digit gains were maintained, which led the overall return."

Both domestic and overseas bonds experienced rising interest rates due to inflation concerns caused by higher oil prices. The value of domestic bonds declined, resulting in negative returns.

Overseas bonds, however, posted positive returns thanks to the rise in the KRW-USD exchange rate.

The return on alternative investments mainly reflected interest and dividend income, along with foreign exchange gains or losses due to currency fluctuations. Fair value evaluation was not included in this quarter’s results.

NPS Chairman Kim Sungjoo stated, "Although the first-quarter investment return has declined somewhat from 10.26% at the end of February due to the impact of the Middle East war, performance has since recovered and remains solid. As a long-term investor responsible for the precious retirement savings of the people, we will continue to strive for higher returns through a steadfast investment philosophy and thorough risk management, no matter how challenging the environment."

Fund poised to surpass 1,800 trillion won by the end of May

Meanwhile, with the domestic stock market soaring after the first quarter, it is estimated that the NPS’s fund assets exceeded 1,800 trillion won as of the end of May.

While the official assets under management were 1,526 trillion won at the end of March, the KOSPI has since surpassed the 8,000 mark, meaning the value of domestic equities alone may have increased by around 200 trillion won compared to the March estimate. Including the recovery in overseas equities and other asset classes, the total fund size is expected to be close to the upper end of the 1,800 trillion won range.

The previous day, the NPS Fund Management Committee reviewed and approved the '2027–2031 Medium-Term Asset Allocation Plan,' which includes raising the target allocation for domestic equities from 14.9% to 20.8% for this year.

The increased allocation to domestic equities alleviates the selling pressure that had been building. By raising the target allocation, this issue has been resolved.

This content was produced with the assistance of AI translation services.