National Pension Service raises domestic stock target allocation to 20.8% and widens the tolerance band to 28.8%
The National Pension Service Fund Management Committee 29 raised the domestic stock target allocation for the end of this year to 20.8% and expanded this year's tolerance band to as much as 28.8%. It lowered the target allocations for overseas stocks and domestic bonds.
The National Pension Service Fund Management Committee 29 revised this year's asset allocation targets. It raised the domestic stock target allocation for year-end to 20.8%. With rebalancing deferred during the year, it decided to open the tolerance band to as much as 28.8%.
In two moves this year alone, it raised the domestic stock target allocation by a total of 6.4 percentage points. It adjusted the target this time to reflect realities, from the target allocation set in 5 last year of 14.4%. The fund said the measures would help mitigate sharp changes in its holdings.
The domestic bond target allocation was lowered to 23.1% for year-end. This is 1.8 percentage points below the target set at the beginning of this year. The fund said it would reduce the allocation gradually, taking into account market conditions including government bond yields.
The year-end target allocation to overseas stocks 34.7%, a further reduction. Earlier this year, the overseas stock target was lowered to 37.2%. With this adjustment, demand for securing dollars is expected to decline by about 370 hundred million dollars.
The fund decided to maintain its long-term policy of expanding overseas and alternative assets. In its medium-term asset allocation plan, as of the end of 2031, the equity share was set at around 55% and the bond share at around 30%. It also decided to resume reducing the target allocation to domestic stocks by 0.5 percentage points annually starting the year after next.
The fund committee said it adjusted the target allocation and its permitted range this time to avoid excessive selling pressure in the market. It explained that two increases this year had brought the target allocation to a level equipped with risk-management safeguards. However, it plans to resume a gradual reduction policy going forward.
Sources: 연합인포맥스
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