NPS logs 5.8% return in Q1 led by US tech stock rally

National Pension Service (NPS) of South Korea, the world’s third-largest pension fund, posted a 5.82% investment return for the first quarter and 1,101 trillion won ($799.9 billion) in assets under management as of March 31, according to its preliminary report on Thursday.

The state-run pension scheme said it saw strong gains on public stocks driven by the US tech share rally, but heightened bond yields limited the rise of the entire investment portfolio return.

On alternative investment, it achieved a 4.11% return which reflects interest and dividend income and currency exchange gains caused by the weak Korean won against the US dollar. The alternative investment return will be adjusted after the portfolio reflects a fair value assessment at the end of this year.

The pension fund gained 13.45% and 5.53% returns on overseas and domestic public stocks, respectively. The shares rose on expectations for Big  Tech and rising demand for artificial intelligence, despite persistent inflation pressure in the US, NPS said.

The pension fund logged 4.48% and negative 0.01% returns on overseas and local public bonds, respectively.

Overseas bonds performed well due to the strong US dollar against the Korean won, despite the rise in bond yields amid concerns that the Federal Reserve’s rate cut will be delayed, NPS said.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com

Jihyun Kim edited this article.