NPS Lifts Korean Stock Target to 20.8% as $1.1 Trillion Fund Seeks to Avoid Forced Sales
Updated
Updated · TheStreet · May 28
NPS Lifts Korean Stock Target to 20.8% as $1.1 Trillion Fund Seeks to Avoid Forced Sales
3 articles · Updated · TheStreet · May 28
Summary
South Korea’s National Pension Service said it will raise its domestic equity allocation to 20.8% by year-end from a 14.9% target set in January, giving Seoul stocks fresh support after a record-setting rally.
The shift is meant to prevent forced Kospi selling as surging share prices push the fund above prior limits, while also easing pressure on the won by reducing the need to buy dollar-denominated overseas assets.
The $1.1 trillion fund will pair the higher local-stock target with 34.7% in foreign equities, 23.1% in domestic bonds, 7.4% in foreign bonds and 14.0% in alternatives, with the changes taking effect from end-June through the rest of 2026.
The backdrop is an exceptionally volatile but booming market: the Kospi slipped 0.5% Thursday after a record close, yet is up 94.2% this year, driven largely by Samsung Electronics and SK Hynix.
Bank of Korea policymakers kept rates at 2.5% for an eighth meeting even as inflation runs at 2.6%, underscoring how pension rebalancing and currency management are becoming central supports for Korea’s rally.