Korea’s NPS Faces Scrutiny After 300 Trillion Won Asset Drop as Delayed Rebalancing Deepened Kospi Swings
Updated
Updated · The Korea Herald · Aug 6
Korea’s NPS Faces Scrutiny After 300 Trillion Won Asset Drop as Delayed Rebalancing Deepened Kospi Swings
3 articles · Updated · The Korea Herald · Aug 6
Summary
About 300 trillion won ($211.8 billion) has been wiped from the National Pension Service’s assets since their peak, as criticism grows that delayed domestic-equity rebalancing worsened the Kospi’s sharp reversal.
The fund suspended domestic stock rebalancing through June and resumed in July at only one-quarter of its previous pace, leaving it more exposed when the Kospi fell from above 9,000 to around 5,500.
NPS had ridden the rally to a 26.18% return through May, with assets reaching a record 1,848.7 trillion won and its Korean equity holdings swelling to 543 trillion won before dropping to an estimated 350 trillion won.
Analysts say the delay removed a normal market brake during the rally and later limited the fund’s ability to buy into the selloff because its domestic-equity allocation was already near practical limits.
The episode sharpens concern over NPS’s dual role—maximizing pension returns while supporting Korea’s market—with officials warning that inconsistent rebalancing could undermine confidence in the fund’s independence.