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NPS to expand stock investment to 45% by 2022

South Korea’s pension behemoth the National Pension Service said it has decided to allocate more funds in stock investment, up to 45 percent of the total fund, by 2022.

Currently managing about 563 trillion won ($503 billion) fund, the NPS’ fund management committee decided on the five-year investment portfolio during 2018-2022 in a meeting at a hotel in Seoul, Thursday.

According to the latest decision, the nation’s largest institutional investor will expand stock investment from 33.7 percent as of the end of 2016 to 45 percent by 2022.

Its overseas stock investment, in particular, will be greatly increased from 15.3 percent at the end of last year to 25 percent in 2022.

In contrast, NPS will reduce its bond investment to 54.9 percent to 45 percent during the same period, it said. Local bond investments will shrink from 50.7 percent to 40 percent, while overseas bond investment will go up from 4.2 percent to 5 percent, during the cited period.

The fund management committee set an average annual return target during the 2018-2022 period of 5.1 percent, considering real GDP growth and inflation.

For the past 10 years from 2007 to 2016, the NPS’ average annual return was 5.38 percent.

The total fund under the management is expected to reach 655.7 trillion won at the end of 2018, while the NPS expects 115.5 trillion won annual income and 20.8 trillion won annual spending next year, the NPS said.

By Kim Yoon-mi (