South Korea's National Pension Scheme To Invest In Overseas And Alternative Assets

The National Pension Service (NPS) of South Korea, which manages the world's third-largest public pension fund, will continue to gradually increase its investment in overseas and alternative assets, according to the welfare ministry.

By 2028, the NPS will invest 55% of its total assets in stocks, 30% in bonds, and 15% in alternative assets, according to a statement released by the ministry on Wednesday.

Its five-year investment target ratios, as determined by the representative panel that governs the fund's investment policies, remained unchanged from last year for the period to 2027.

The NPS held 42.6 percent of its total 953.2 trillion won ($721.61 billion) in assets in stocks, 40.8 percent in bonds, and 16.0 percent in alternative assets as of the end of March.

In its annual review, the panel raised the fund's investment return target for the next five years to 5.6 percent, up from 5.4 percent set for the end of 2027.

The decision was made at a meeting in May to review the fund's mid-term investment strategies and portfolios.

It came two months after South Korean President Yoon Suk Yeol directed that "extraordinary measures" be prepared to boost the fund's earnings.

With the country's population ageing rapidly, the fund is expected to be depleted by 2055. It has been actively expanding investment in risky and overseas assets for higher returns.