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NPS Posts Record 13.59% Return for 2023

 

- Assets under management hit the KRW 1,000 trillion milestone for the first time -

 

□ In 2023, the National Pension Service earned the highest annual return since the NPS Investment Management was established in 1999.

○ The NPS Investment Management, a dedicated fund management arm of NPS (Chairman & Chief Executive Officer Kim Tae-hyun), announced on Feb. 28, 2024 that the National Pension Fund ended Dec. 31, 2023 with a preliminary return of 13.59% on a money-weighted return basis, equivalent to KRW 127 trillion, raising its total asset value to KRW 1,036 trillion.
※ The time-weighted return for the year 2023 is 14.4%.

○ Since its inception in 1988, the Fund has generated KRW 578 trillion in investment income and achieved an annualized return of 5.92%. The cumulative investment gains account for 55.8% of the total AUM.

□ Amid concerns over global economic slowdown early in the year, strong performance of equity and fixed income markets at home and abroad propelled the value of its assets to a record high.

 

□ By asset class and on a money-weighted return basis, the top performing asset class was global equities with a return of 23.89%, followed by domestic equities at 22.12%, global fixed income at 8.84%, domestic fixed income at 7.40%, and alternative assets at 5.80%.

 

 

○ Despite heightened market uncertainty triggered by the banking crisis in the U.S. and geopolitical risks in the Middle East, domestic and global equity investments performed well as investor appetite for risky assets remained firm due to improved performance of individual companies.

* Domestic Stock Market (KOSPI): up 18.73% from the start of the year
Global Stock Market (MSCI ACWI ex-Korea, in USD terms): up 22.63% from the start of the year

 

○ In the face of concerns over interest rates staying higher for longer, domestic and global bond prices rose on growing hopes for the end of the tightening cycle and interest rate cuts by the U.S. Federal Reserve, driven by inflation slowdown.

 

□ For alternative investments, capital appreciation and realized gains were reflected, and a rise in the USD/KRW exchange rate also contributed to the increase in the Fund’s value.

 

□ Kim Tae-hyun, Chairman & CEO of NPS, said: “Amid the challenging investment environment marked by geopolitical risk and market volatility in 2023, we have been able to surpass the KRW 1,000 trillion AUM mark largely due to diversified portfolios and strengthened investment expertise.”

○ “Going forward, we will strive to enhance flexibility in asset allocation and broaden investment sources in a bid to deliver higher returns.”

 

□ The performance assessment of the Fund for the year 2023 will be reviewed by the Special Committee on Risk Management and Performance Evaluation & Compensation, and then finalized at the National Pension Fund Management Committee around at the end of June.

 

 

 

<Appendix> National Pension Fund as of December 31, 2023