S Korea's pension fund to increase investment in stocks

09:10, June 17, 2010      

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South Korea's largest institutional investor National Pension Service (NPS) will reshape its portfolio by increasing the portion of stocks while reducing bond assets by 2015 as it aims to draw more stable returns and high profitability, the health ministry said Wednesday.

According to the Ministry of Health and Welfare, the National Pension Service (NPS) plans to raise its portion of investment into local and overseas stocks to 30 percent from the current level of 17.9 percent by 2010.

The portfolio revision will pull up the portion of domestic stocks to 20 percent of the total assets from the 13.1 percent as of end-2009, with foreign stocks taking up 4.8 percent, down from the 10 percent level, the ministry said.

Meanwhile, the fund will revise down its portion of bond holdings to 60 percent from the 77.7 percent level during the same period as a result of an analysis of S. Korea's pension fund to increase investment in stocks, the ministry added.

According to the health ministry, the revision will bring about an annual return of 6.7 percent by the fund in 2015, while the NPS drew an investment return of 10.39 percent in 2009.

The NPS, with the investment totaling 277.64 trillion won (229. 3 billion U.S. dollars) under its management as of end-2009, will likely see its assets expand to 488 trillion won (400 billion U.S. dollars) by 2015, the ministry predicted.

South Korea's NPS is currently the world's fourth-largest pension fund, following Japan's public pension fund, the Norwegian national fund and the Dutch government pension fund.



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