The National Pension Service (NPS) reported an annual time-weighted return of 31.64% last year by investing in global equities, outperforming the market by 0.19% points, according to the NPS 2019 Annual Report released on August 11.
The annual returns of the passive-internal investment strategy amounted to 33.35% (+1.03% points outperforming the benchmark), while passive-external and active-external investment strategies registered returns of 23.52% and 31.20% respectively.
Outperformance with the developed market internally managed funds offset the underperformance of the emerging market externally managed funds, resulting in the positive result for passive investment as a whole. Active-external investment generated an underperformance to the benchmark, but it contributed to the positive performance of the whole portfolio as it accounts for the highest portion of the overseas investment portfolio.
Due to the recovery of global stock markets, global equity investment grew to 166.5 trillion won ($140 billion), or 22.6% of the total assets as of December 31, 2019, up 4.9% points from 2018, the largest rise among the classes. Last year, global stock markets showed a strong performance due to the improved economic outlook, resolving U.S.-China trade conflicts, and loose monetary policies of major economies. (Source: NPS 2019 Annual Report, August 11. Translated by Capital Connect)