National Pension Service Sees Q3 Valuation Drop by Over KRW 182 Trillion... First Decline in 7 Quarters

[Anchor]

As the domestic stock market recently plummeted, the National Pension Service (NPS), which is responsible for the retirement assets of the public, took a direct hit. In just three and a half months, the estimated value of its stock holdings evaporated by more than 180 trillion won. Critics point out that the NPS failed to respond promptly to market volatility, thereby increasing its losses.

Reporter Kim Hye-min has the details.

[Reporter]

As of the 15th, the total stock valuation of 287 listed companies in which the National Pension Service disclosed a stake of 5% or more stood at KRW 333.5 trillion.

Compared to the KRW 515.9 trillion valuation of these stocks at the end of June, more than KRW 182 trillion evaporated in just three and a half months.

On a quarterly basis, this marks the first decrease in seven quarters since the fourth quarter of 2024, and the reduction is the largest in history.

The service has effectively given up most of the gains it made during the bull market in the first half of this year.

The decrease in valuation for SK Hynix and Samsung Electronics combined accounted for about KRW 131 trillion, making up 72% of the total decline.

The NPS has traditionally engaged in rebalancing, selling stocks when they are expensive and buying them when they are cheap to maintain its target investment ratio.

However, the Fund Management Committee temporarily suspended rebalancing in January amid a sustained bull market, and substantially raised its target ratio for domestic stocks in May. Analysts point out that this ultimately left the fund unable to respond to the market downturn.

[Professor Seok Byung-hoon / Department of Economics, Ewha Womans University: If the National Pension Service had adhered to its rebalancing principles when stock prices surged rapidly, it could have prevented the KOSPI from overheating due to excessively fast gains. Instead of realizing profits when prices rose and holding onto them, it ended up bearing massive losses...]

With rebalancing resuming in July, the NPS has actually been offloading stocks during the market downturn.

Pension funds, including the NPS, have continued net selling since August, and have already sold off close to KRw 200 billion this month.

[Park Seok-hyun / Researcher, Woori Bank: It is difficult to expect conditions where the pension fund can soon turn back to net buying from a portfolio adjustment perspective, and it is unlikely to act as a decisive supply-and-demand turning point.]

Amid a continuous wave of foreign selling in the local stock market, individual investors' purchasing power is also dwindling, leading to concerns that a supply-and-demand vacuum could be prolonged as the National Pension Service fails to serve as a safety net.

(Video editing: Cho Mu-hwan, Design: Park Chun-woong, Park Tae-young)
※ Please note: This article was translated by AI and may contain errors.