SOUTH KOREA - South Korea's US$202bn National Pension Fund is to commission foreign asset managers to increase its domestic and overseas equity allocation, as bonds fall out of favour.
Following a fall in yield of nearly 50% in three-year government bonds, the country’s largest institutional investor has decided to reallocate some of its 78.1% holding in the asset class. In contrast, the Kopsi index rose 41% in the same period.
Daehan Investment Trust Management’s Lee Chun Soo, who manages $3.7bn of the fund, said: “These plans could encourage other pension funds in the country to change their conservative investment styles.”
The fund would up its local equity investments from 10.9% to 13.6% and overseas equities from 0.7% to 2.8%.
The fund is expected to grow 16% to KRW220trn (US$233bn), but minister for health and welfare Rhyu Si Min did not identify where the fund’s investments would be heading.
“We’re too big to fit into local markets; we have to turn our attention overseas,” he said. “We’re still a small fish that isn’t used to life in the big ocean. We must learn by watching others.”
The South Korean government recently considered the idea of raising the retirement age from 57 to 62 to address its aging population issue.
Life expectancy in the UK saw no improvement between 2015 and 2017 as the number of people aged over 90 hit a record high, latest Office for National Statistics (ONS) data reveals.
Self-administered pension funds spent £14bn on payments to pensioners in Q2 2018, but only received £11.4bn of contributions (net of refunds), latest Office for National Statistics (ONS) data reveals.
The Pensions and Lifetime Savings Association (PLSA) has named the 17 members of its inaugural policy board after a competitive application process with 60 candidates.