South Korea’s National Pension Service (NPS) will rev up its efforts to maintain stable returns by continuing to diversify its investments, Health and Welfare Minister Park Neung-hoo said on Wednesday before a meeting of the NPS Fund Management Committee (FMS).
“NPS has been pursuing mid-term asset allocation strategies aiming to expand the proportion of risky assets and overseas investment in its portfolio while reducing the proportion of domestic stocks,” said Park, who also chairs the committee. “We will do our best to respond actively to changes in the financial market by monitoring the market thoroughly and to steadily increase our returns as a long-term investor in the post-COVID-19 era.”
FMS was held to discuss mid-term asset allocation strategies that will be applied for five years from next year to 2025 and fund management plans for next year.
The health ministry oversees the world’s third-largest pension fund, which had 738 trillion won ($600 billion) in assets under its management as of the end of February. The pension fund aims to increase the total to over 1000 trillion won by 2024.
“NPS is currently in the midst of ‘fund accumulation period’ when the premium income is higher than the expenditure,” Park said. “It’s a time when NPS should do its best to stabilize the fund’s finances by enhancing long-term investment returns through active fund management.”
“With the long-term economic outlook at home and abroad uncertain due to the COVID-19 crisis, NPS will try to maintain stable investment performance by faithfully following mid-term asset allocation strategies while using full-risk management strategies to mitigate risks,” he said.
“Although the financial market is currently stabilizing, the financial market and long-term macroeconomic prospects are still hard to predict,” Park said. “NPS will keep helping to stabilize the domestic financial markets by buying domestic and foreign stocks in accordance with pre-set rules whenever asset prices plunge due to increased volatility.”