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Photo courtesy of Yonhap News |
[Alpha Biz= Ellie Kim] National Pension Service (NPS) is set to determine its target allocation for domestic equities on May 28, a decision closely watched by financial markets.
The Ministry of Health and Welfare will convene the fifth National Pension Fund Management Committee meeting later today to approve the mid-term asset allocation plan for 2027–2031.
As of the end of this year, the NPS portfolio targets domestic equities at 14.9%, alongside 37.2% in global equities, 24.9% in domestic bonds, 8.0% in global bonds, and 15.0% in alternative investments. Including tactical and strategic flexibility, the maximum domestic equity allocation is capped at approximately 19.9%.
However, a strong rally in the Korean stock market has pushed the actual domestic equity weighting to around 24.5% as of the end of February, likely higher in recent months.
If the NPS moves to rebalance by reducing its domestic equity exposure, it could exert downward pressure on the local stock market. Conversely, raising the allocation target would likely be interpreted as a positive signal for equities.
Such a move, however, may reignite debate over potential government influence on markets through pension fund management, often referred to as “pension intervention.”
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
