보건복지부 영문홈페이지

NPS Posts 6.35% Return in Q1,
Recouping Most of its 2022 Losses

- Financial markets rallied on signs of easing inflation and a slowdown in the pace of tightening.

- NPS earned an investment income of KRW 58.4 trillion in Q1, and ended the quarter with KRW 953.2 trillion in AUM including a cumulative investment income since inception of KRW 509.7 trillion.

□ The National Pension Service Investment Management, a dedicated fund management arm of the National Pension Service (NPS; Chairman & Chief Executive Officer Kim Tae-hyun), announced on May 30, 2023 that the National Pension Fund delivered a preliminary return of 6.35% for the first quarter that ended on March 31, 2023.

○ In the first quarter of 2023, the Fund earned an investment income of KRW 58.4 trillion. The Fund ended the quarter with a preliminary value of KRW 953.2 trillion, including a cumulative investment income since inception of KRW 509.7 trillion.

○ During the three-month period alone, its 8.2% losses in 2022, equivalent to approximately KRW 79.6 trillion, were mostly recouped.

□ Despite the banking turmoil in the U.S. and Europe, as well as concerns about a potential economic slowdown, strong equity and fixed income gains helped drive overall performance.

○ Financial markets showed strength on expectations that inflation will come down and the Federal Reserve will adjust its tightening pace by slowing interest rate hikes*.
* The Fed raised interest rates by 0.25 percentage points in February and March.

□ By asset class and on a money-weighted return basis, domestic equity returned 12.42% and overseas equity returned 9.70%. Domestic fixed income returned 3.25% and overseas fixed income returned 5.38%. Alternatives returned 3.49%.

○ Despite fears of a banking crisis in the U.S., domestic and overseas stock markets performed well, supported by the preference for risky assets on signs that the Fed will slow its pace of rate hikes.

○ Fixed income yields slipped on growing hopes of an end to the Fed’s tightening cycle following its multiple rounds of interest rate increases.

○ As for alternatives, actual performance of the assets will be assessed at the end of the year by reflecting fair market valuation, dividend, interest income and gain/loss from foreign exchange movements.

□ During the January-March period, all of the Fund’s traditional asset classes outperformed their respective benchmarks*.

○ Domestic equity outperformed its benchmark by 0.05%p; overseas equity by 0.57%p; domestic fixed income by 0.11%p; overseas fixed income by 0.06%p.

* Benchmark is used to measure investment performance with a time-weighted return.

□ Kim Tae-hyun, Chairman & CEO of NPS, said: “Even amid mounting global economic uncertainty surrounding the effects of monetary policy tightening and a potential recession in major economies, the Fund delivered good returns.”

○ “We will continue to proactively address growing market volatility and further diversify our investment portfolios to bolster returns.”

<Appendix> National Pension Fund as of March 31, 2023 (Q1 End)