South Korea’s National Pension Service (NPS) earned 9.71% return on its investments in the first half of the year, thanks to a global market rally driven by US technology stocks.
The return was up from 9.1% in the same period a year ago.
The NPS has now earned 680.4 trillion won (US$507.8 billion) from investments since it was formed in 1988, boosting total assets under management to 1,147 trillion won as of June 30, the world’s third largest pension fund says in a statement on August 29.
Its investments in global equities, which account for about one-third of assets, earned 20% return compared to 17.2% in the first half of 2023.
“The strong performance of US technology stocks led to favourable returns for domestic and international stocks,” the NPS says, noting that US large-cap stocks were boosted by increasing demand for artificial intelligence.
The S&P 500 rose around 15% in the first half of the year on the back of mega technology stocks such as chip maker Nvidia.
Meanwhile, the NPS says the Korean won’s strength against the US dollar helped improve returns on its global bond investments, which rose to 7.95% in the six months through June from 6.2% in the first half of 2023.
The fund’s alternative investments, including real estate, venture capital and infrastructure, delivered a return of 7.79%, which came from dividend income and foreign exchange gains from the local currency’s appreciation. The NPS did not provide the year-ago return for alternatives.