South Korea National Pension Service to Increase Domestic Stock Holdings

The National Pension Service of South Korea will increase its domestic stock holding ratio from 14.9% ^[1] to 20.8% ^[1].

This adjustment is critical for the KOSPI market, as it signals that the nation's largest institutional investor will not trigger a large-scale sell-off despite the current market rally. A sudden liquidation of assets by the fund could lead to significant volatility in South Korean equities.

The fund decided to shift its asset allocation to reflect high returns and the ongoing rally in the KOSPI market ^[2]. To accommodate this increase, the service is reducing its proportions of overseas investments, bonds, and alternative investments ^[2]. This move follows a smaller increase of 0.5 percentage points ^[1] recorded in January.

Reports indicate that the fund manages assets totaling 250 trillion won ^[3]. While some analysts expressed concerns that the proportion of domestic equities had become too large ^[3], the service has signaled that a "selling bomb" is unlikely to materialize ^[4].

The new target represents an increase of 5.9 percentage points ^[1]. Under certain conditions involving asset excess allowance ranges, the potential maximum holding ratio could exceed 25% ^[1].

"The National Pension Service has decided to expand its domestic stock holding ratio from 14.9% to 20.8%," a YTN anchor said ^[4]. The anchor also said that because the fund does not need to sell domestic stocks on a large scale, the feared market crash is not expected to occur ^[4].