National Pension Service Earned 231 Trillion Won from Domestic Stocks Last Year, Achieving the Highest Return Rate Ever
The National Pension Service reported an unprecedented annual profit of 231 trillion won in 2022, marking the highest performance since its establishment.
The National Pension Service (NPS) of South Korea has reported remarkable financial results for the year 2022, amassing a profit of approximately 231.6 trillion won, which is notably 4.7 times the annual pension payout of about 49.7 trillion won. The annual return rate stood at 18.82%, the highest since the fund's inception in 1988, with a cumulative annual return of 8.04% and total assets reaching 1458 trillion won. The outstanding performance was significantly driven by a robust domestic stock market, where domestic stocks yielded a return of 82.44%, attributed to growth in technology sectors like artificial intelligence and semiconductors alongside governmental policies favoring capital markets.
Additionally, the NPS's international investments in overseas stocks produced a return rate of 19.74%, reflecting a strong performance despite uncertainties in U.S. tariff policies. Meanwhile, domestic bonds yielded a modest 0.84% return, achieving a positive result after several fluctuations post-rate cuts, and overseas bonds realized a 3.77% return due to rising bond prices linked to U.S. interest rate adjustments. The alternative investments of the fund grew at an 8.03% return, benefitting from increased asset valuations and realized profits, underscoring the NPS's diverse investment strategies.
Comparatively, the NPS's performance has outpaced other major pension funds globally, such as Japan's GPIF at 12.3% and Norway's GPFG at 15.1%. The NPS's chairman, Kim Sung-ju, attributed this success to the fund's rigorous risk management and strategic asset diversification efforts. Furthermore, he emphasized the organization's ongoing commitment to expanding operational capabilities and enhancing investment strategies to sustain stable long-term returns amid growing fund size.