Korea’s National Pension Service (NPS) is strengthening its operating system to better manage portfolio risk amid uncertainty in global markets, according to Won Joo Seo, executive fund director and chief investment officer of the pension giant.
He said that even though the pension fund achieved a “good” record 18.82% investment return last year, it remains vigilant over rising volatility in Korean and international markets.
“Global market uncertainty and transformation are becoming more complex and structural. Competition among countries in security, industrial policy and technology has led to shifts in capital flows,” Seo said in his keynote speech at a forum on pensions and investments
organised by Asia Asset Management in Seoul on May 20.
To manage its investment portfolio, including stocks and bonds, the NPS uses an operating system that enables it to respond flexibly to changes in markets.
“In the future, we plan to advance this operating system to include risk and profitability analysis,” Seo said.
He emphasised that risk management is as important as profits and said the NPS is in the process of setting up a dedicated response team to monitor daily market developments and implement appropriate response strategies.
Seo highlighted the importance of continually improving investment infrastructure, with a strong focus on security and comprehensive management.
Last year, the NPS began upgrading its operating infrastructure for foreign investments.
The new system will operate via a cloud-based investment network that links the pension fund’s headquarters in the city of Jeonju and its overseas offices in London, San Francisco, New York and Singapore. Seo said it will support market data analysis and increase the efficiency of investment decision-making.
The NPS is the world’s third largest pension fund with around 1,600 trillion won (US$8.27 trillion) of assets.
