National Pension sees dip in fortuneReturns from Korea’s National Pension Service, the nation’s biggest investor, slowed last year as a slump in global equity markets countered gains from alternative investments.
The fund posted a preliminary 2.3 percent return in 2011, the Ministry of Health and Welfare said in an emailed statement yesterday. That compares with a 10 percent gain in 2010.
Korea’s benchmark Kospi index dropped 11 percent last year, the most since 2008, while the MSCI All World Index sank 9.4 percent, as Europe’s debt crisis and a slowing U.S. economy hurt global growth. The fund had 17.8 percent of its assets in domestic stocks at the end of 2011, it said. The California Public Employees’ Retirement System, the largest U.S. public pension fund, earned 1.1 percent in 2011.
“The Korean fund’s returns weren’t bad last year, and the slowdown was inevitable because of higher volatility in equities,” said Chang In-whan, president of KTB Asset Management, which oversees the equivalent of $5.8 billion.
National Pension had 64.5 percent of its assets in domestic bonds at the end of last year, the welfare ministry said in a statement today. “Overseas alternative investments” accounted for 3.3 percent, and include a shopping mall near Paris, London’s Gatwick Airport and Colonial Pipeline, operator of the pipeline linking U.S. Gulf Coast refiners and East Coast markets.
The Korean fund aims to have at least 20 percent of assets in domestic equities by the end of 2016, while domestic bonds will make up less than 60 percent, it said in June. The Kospi has gained 9.3 percent this year.
The fund will announce final figures for 2011 in June, according to yesterday’s statement. National Pension was set up in 1988. Bloomberg
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