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Korea’s $1 trillion pension fund has record gains on Kospi rallyThe fund, which managed 1,458 trillion won ($1.02 trillion) as of end-2025, returned 18.82% for the year, according to a statement Friday, marking a third straight year of record gains. That surpassed its previous high-water mark of 15% set a year earlier and the best result since its establishment in 1988.By Bloomberg  February 27, 2026, 11:59:22 AM IST (Published)2 Min ReadSouth Korea’s National Pension Service, one of the world’s largest public pension funds, posted its strongest-ever annual return in 2025 as a semiconductor- and artificial intelligence–driven stock rally boosted performance.

The fund, which managed 1,458 trillion won ($1.02 trillion) as of end-2025, returned 18.82% for the year, according to a statement Friday, marking a third straight year of record gains. That surpassed its previous high-water mark of 15% set a year earlier and the best result since its establishment in 1988.

NPS’s domestic equities portfolio led the gains, surging 82.44%, while overseas stocks returned 19.74%.

The record performance comes as the NPS re-calibrated its asset allocation for 2026 last month, raising its target exposure to domestic shares amid the Kospi’s blistering rally. It also decided to trim a planned reduction in overseas equities by about $20 billion.

As of end-November, 38.2% of assets were invested overseas, 21.5% in domestic bonds and 17% in domestic stocks.

The NPS’s moves are closely watched by investors given its size and its potential influence on markets and the won, which has faced pressure amid heavy outflows from retail investors in favor of US assets.

“The NPS will continue to strengthen asset management capabilities with the growing size of the fund,” Chief Executive Officer Kim Sung-joo said in the statement. “The fund will pursue flexible asset allocation, investment strategies, and geographic diversification to maximize stable long term returns.”

The benchmark Kospi index has climbed more than 45% this year to surpass 6,000, exceeding President Lee Jae Myung’s campaign slogan of 5,000. The gauge advanced more than 75% last year, making it one of the world’s top performers.

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