□ The National Pension Fund delivered an investment income of KRW 83.9 trillion in the first half of 2023, recovering from a KRW 79.6 trillion loss incurred in 2022 and generating an additional gain of KRW 4.4 trillion.

 ○ The NPS Investment Management, a dedicated fund management arm of National Pension Service (NPS; Chairman &　Chief Executive Officer Kim Tae-hyun) announced on August 29, 2023 that the Fund returned 9.09% (preliminary) in the January-June period.

 ○ The return was equivalent to KRW 83.9 trillion, raising the cumulative investment income since inception to KRW 535.3 trillion and the assets under management of the Fund to KRW 983.1 trillion* as of June 30, 2023.

     * As of December 31, 2022, the Fund was valued at around KRW 890.5 trillion.

□ In 2022, NPS posted a loss of KRW 79.6 trillion as it faced unprecedented declines in both equity and fixed income markets; however, as of June 30, 2023, all valuation losses were recouped and then an additional investment income of KRW 4.4 trillion was generated.

 ○ Despite fears of the global banking crisis and recession at the beginning of this year, NPS performed well with strong gains from equity and fixed income assets, fueled by a slowdown in inflation and the adjustment of interest rate hike pace.

□ By asset class and on a money-weighted return basis, the top performing asset class was global equity with a return of 17.24%, followed by domestic equity at 17.12%, global fixed income at 6.21%, alternative assets at 5.01%, and domestic fixed income at 2.72%.

 ○ Even in the face of worries over banking crisis in the U.S., domestic and global equity delivered solid returns, boosted by improved appetite for risky assets as the U.S. debt ceiling issue was resolved and economic indicators showed a positive trend.

 ○ Amid central banks’ ongoing hawkish stance on rate hikes, the decline in domestic and global fixed income yields was limited, affected by expectations of cooling inflation and a slowdown in the tightening pace.

 ○ As for alternative assets, most of the investment income derives from interest and dividend income, as well as foreign exchange gains from a rise in the USD/KRW exchange rate. The fair values of alternatives are assessed annually at the end of the financial year, and thereby are not reflected into the quarterly performance.

□ Kim Tae-hyun, Chairman & CEO of NPS, said: “2022 was a very challenging year for asset management due to unfavorable economic and investment conditions. However, as of June 30, 2023, all the losses from last year were recovered and an additional investment income was generated.”

 ○ “We will continue to strive to enhance investment returns by building a well-diversified portfolio and capturing new investment opportunities.”  

<Appendix> National Pension Fund as of June 30, 2023