Korea Investment Corp.’s investment portfolio was valued at $84.7 billion at the end of 2014, up 17.6% from the year before, said its latest annual report, released Monday.
For the year, KIC posted a total investment gain of $2.7 billion, or 3.8%, on total assets under management after costs, and 9.79% against a basket of 33 currencies used by the sovereign wealth fund. For the past five years, the corresponding figures for the fund’s annualized returns were 7.43% and 5.66%, respectively.
A KIC spokesman couldn’t immediately explain why the fund’s year-end value of $84.7 billion was up a much stronger 17.6% for the year.
At the end of 2014, equities accounted for 43.8% of KIC's portfolio, down from 48.4% the year before. Fixed income, meanwhile, stood at 39.2% of the portfolio, up from 34.3% the year before.
Alternative allocations held steady at 8% of the portfolio, with 3.8% in private equity, 2.2% in hedge funds, 1.8% in real estate and 0.2% in “cash, other” investments.
The “other” category under traditional assets — made up of inflation-linked bonds, commodities, cash and hybrids — slipped to 7.5% of the portfolio from 7.7%.
“Special investments,” which refers to the investment KIC has maintained in Bank of America Corp. since the global financial crisis, edged down to 1.5% of the portfolio from 1.6%.
The annual report pegged KIC’s mix of internally and externally managed assets at 73.2% and 26.8%, respectively. A KIC spokesman couldn’t immediately provide the prior year’s breakdown.
The annual report said KIC, 10 years after the sovereign wealth fund’s launch, will introduce an internally managed active quantitative strategy, but it offered no details on the timing and scale of the fund’s plans.
The report said KIC’s tactical asset allocation efforts in 2014 helped produce returns “that significantly exceeded the benchmark” but didn't specify how much alpha could be attributed to those efforts.
