South Korea's National Pension Service, Seoul, will shift an additional 5% of its portfolio to overseas stocks from domestic bonds over the five years ending Dec. 31, 2021, said a spokeswoman for the 519.7 trillion won ($441 billion) pension fund.
The national pension fund investment committee at South Korea's Ministry of Health and Welfare, which oversees the NPS, decided Monday on new “intermediate” asset allocation targets of “around 25%” for overseas stocks and “around 40%” for domestic bonds by 2021.
The prior intermediate targets for the five years ending Dec. 31, 2020, had called for “around 20%” to be allocated to overseas stocks and “around 45%” to be allocated to domestic bonds, the spokeswoman said.
Targets for other asset classes held steady, at "around 20%" for domestic stocks, "more than 10%" for alternatives and "around 5%" for overseas bonds, she said.
According to the NPS website, as of Feb. 28, the pension fund's allocation was 52.7% domestic bonds, 18% domestic equities, 13.3% overseas equities, 11.1% alternatives, 4.4% overseas bonds, and the rest in cash and other.
For the end of 2016, the pension fund's target allocation is 51.4% domestic bonds, 20% domestic equities, 13.1% overseas equities, 11.5% alternatives and 4% overseas bonds.