390 Trillion Won Increase in 5 Months as KOSPI Surges... National Pension Fund Reserves Surpass 1,800 Trillion Won

Total Return Reaches 26.18% as of End-May

The National Pension Fund's reserves surpassed 1,800 trillion won as of the end of May. As the domestic stock market posted triple-digit gains, the fund's overall rate of return exceeded 26%.

On July 31, the National Pension Service announced that as of the end of May, the fund's reserves had reached 1,848.7 trillion won, with the cumulative rate of return since the beginning of the year at 26.18% (provisional, weighted by amount).

Reserves Reach 1,848 Trillion Won... Increased by 390 Trillion Won in 5 Months

The fund's reserves increased by 390.7 trillion won over the past five months, up from 1,458 trillion won at the end of last year. Of this amount, the financial segment accounted for 1,847.7 trillion won, making up 99.9% of the total, while the welfare and other segments accounted for 221.6 billion won and 806.6 billion won, respectively.

By asset class, overseas equities had the largest share at 35.2%, followed by domestic equities at 29.4%, domestic bonds at 15.7%, alternative investments at 13.8%, overseas bonds at 5.8%, and short-term funds at 0.2%.

In terms of valuation, overseas equities stood at 650.7 trillion won, domestic equities at 543.6 trillion won, domestic bonds at 289.6 trillion won, alternative investments at 254.5 trillion won, overseas bonds at 107 trillion won, and short-term funds at 4.2 trillion won.

Notably, the valuation of domestic equities more than doubled from 263.7 trillion won at the end of last year to 543.6 trillion won, significantly narrowing the gap with overseas equities, which had long been the largest asset class within the fund.

Domestic Equities Up 106.76%... Driven by Triple-Digit KOSPI Gains

By asset class, the rates of return were as follows: domestic equities 106.76%, overseas equities 16.13%, domestic bonds -2.42%, overseas bonds 5.80%, alternative investments 7.70%, and short-term funds 2.03%.

The National Pension Service explained, "Despite geopolitical risks in the Middle East, the strong performance centered on semiconductors led to triple-digit gains in domestic equities, driving the fund's overall rate of return." Over the same period, the KOSPI rose by 101.13% compared to the beginning of the year.

Overseas equities also rose, supported by solid fundamentals in technology stocks driven by demand for artificial intelligence (AI). The rate of return on overseas equities was 10.67% in dollar terms, compared to 16.13% in won terms, a difference of more than 5 percentage points. This is attributed to foreign exchange gains from the weak won.

Domestic bonds posted negative returns due to a decline in valuation from rising interest rates. In contrast, overseas bonds delivered positive returns, benefiting from currency appreciation despite higher interest rates.

The alternative investment figures reflect fair value as of the first quarter. The National Pension Service stated, "Solid returns were achieved due to rising valuations of assets such as infrastructure and private equity, as well as interest and dividend income, and foreign currency translation gains and losses from exchange rate fluctuations."

All Four Asset Classes Outperformed Benchmarks... Cumulative Investment Profits Reach 969 Trillion Won Since Inception

Performance was strong even compared to market returns. In won terms, domestic equities outperformed the benchmark (BM) by 4.34 percentage points, overseas equities by 1.17 points, overseas bonds by 0.55 points, and domestic bonds by 0.03 points. All four asset classes exceeded their respective benchmarks.

For the medium to long term, the average rate of return was 16.05% for the most recent three years (2023–2025), 10.51% for the most recent five years (2021–2025), and an annual average of 8.04% since the fund's inception in 1988. Investment profits accumulated since inception amounted to 969.3 trillion won. Last year, the annual rate of return was 18.82%, with profits of 231.6 trillion won.

The National Pension Service added, "These figures are provisional, and because fund management costs are not deducted in the year-to-date calculation but are reflected in the year-end calculation, the final rate of return may change."

Meanwhile, this disclosure by the National Pension Service is based on the end of May and does not reflect the sharp decline in the domestic stock market in July.

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