Korea’s pension fund posts 27 percent return as stocks drive record gains
The National Pension Service reached 1.87 quadrillion won ($1.36 trillion) by June, though the Kospi’s later plunge could weigh on second-half performance.
A person walks out of a regional office of the National Pension Service in Seodaemun District, western Seoul, on June 29.NEWS1
The National Pension Service (NPS) posted a record return of more than 27 percent in the first half of the year as a powerful stock-market rally fueled gains, the state-pension agency said Friday.
The NPS fund stood at 1.87 quadrillion won ($1.36 trillion) as of the end of June. Its preliminary money-weighted return was 27.22 percent, according to the NPS Investment Management headquarters.
The fund grew by more than 339 trillion won in just three months, from 1.53 quadrillion won at the end of the first quarter. The reserve reached an all-time high.
By asset class, domestic equities delivered the strongest return of 107.37 percent, followed by overseas equities at 17.81 percent, alternative investments at 9.6 percent and overseas bonds at 9.22 percent. Domestic bonds were the only asset class to post a loss, with a return of minus 3 percent.
Still, domestic equities delivered a triple-digit return as uncertainty over the Iran war eased and corporate earnings improved, particularly among semiconductor companies.
The 107.37 percent return was exceptional compared to the 11.26 percent annual average for domestic equities between 1988, when the NPS was established, and last year. Rising share prices also pushed domestic equities’ portion to 29.1 percent of the fund's total assets at the end of June, up from 18.1 percent at the end of last year.
Overseas equities returned 17.81 percent as the AI investment cycle continued and technology companies delivered solid earnings.
Interest rates and exchange rates shaped bond returns. Domestic bonds lost value as the U.S. Federal Reserve kept its benchmark interest rate unchanged and major central banks continued to tighten monetary policy.
A person shows dollars at a Hana Bank in central Seoul on Dec. 17, 2025.YONHAP
On the contrary, overseas bonds delivered positive returns due to the weaker won.
The 9.6-percent return on alternative investments factored in interest and dividend income, gains and losses from dollar-won exchange rates and fair-value assessments available at the time of calculation.
The fund's record size may decline in the second half of the year. The Kospi plunged about 18.5 percent to 6,912.37 on Thursday from 8,476.48 on June 30.
"There have been some fluctuations in returns amid heightened volatility in the second half, but the fund continues to deliver solid performance," NPS Chairman Kim Sung-joo said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
