<!-- Swiftype Variables -->

Pension Funds

S. Korea’s NPS boosts global equity, alternatives targets at expense of local stocks and bonds

South Korea's National Pension Service on Wednesday raised its target allocations for global equities and alternatives by 5 percentage points each for the five-year period through the end of 2023.

A Seoul-based spokesman for the 625.9 trillion won ($580 billion) pension fund said NPS' fund management committee met Wednesday to complete the fund's annual, medium-term asset allocation exercise.

For the five years through Dec. 31, 2023, the committee left the fast-growing portfolio's overall allocation to equities unchanged at 45%, but shifted the balance heavily in favor of global equities.

The latest midterm targets call for a 30% weighting to global equities, double the 15% weighting for domestic equities.

For the five years through Dec. 31, 2022, the global-domestic equity split was 25% to 20%.

As of the March 31 close of the latest quarter, the fund's domestic equity weighting, at 20.9%, still exceeded the 17.4% exposure to global equities.

The updated midterm asset allocation plan likewise targets a 15% weighting in alternatives, up from the "over 10%" weighting outlined in the five-year plan through 2022.

The fund's alternatives allocation as of March 31 stood at 10.7% — with an overseas-domestic split of roughly 2-to-1.

NPS' target for domestic fixed income, meanwhile, fell to 35% from 40% in the prior year's midterm allocation plan. The fund's allocation to domestic bonds as of March 31 was 46.7%.

The target for global bonds stands at 5%, unchanged from the prior year's midterm allocation plan but up incrementally from its 3.8% allocation as of March 31.