South Korea's National Pension Service, the nation's biggest investor with 225 trillion won ($176 billion) in assets, will cut its equity investments and add bonds next year after stock declines eroded returns, Bloomberg reported.
Domestic stocks will account for 17 percent of its assets by the end of 2009, down from an earlier target of 20.3 percent, the fund said today in an e-mailed statement. Bonds will make up 69.3 percent of assets next year, from 60.4 percent planned earlier, according to the statement.
``It's quite natural for the fund to revise its investment plan given the current and expected market conditions,'' said Lee Jin Woo, a fund manager at KTB Asset Management Co. in Seoul, which oversees the equivalent of $7 billion in assets. ``South Korean markets will see continued volatility in the first six months, during which I'm planning to reduce our stock holdings before the upward trend in the late second half.''
Public pension funds have been reporting declining returns as a global equities rout triggered by the credit crunch led to losses. The California Public Employees' Retirement System, the largest U.S. public pension fund, posted its worst performance in six years in the year ended June, while Norway's Government Pension Fund - Global reported its biggest quarterly drop since its inception in 1996.