S. Korea's Sovereign Wealth Fund Earns $21.8 bln in 2020 | Be Korea-savvy

S. Korea’s Sovereign Wealth Fund Earns $21.8 bln in 2020

The financial district of Yeouido in Seoul. (Yonhap)

The financial district of Yeouido in Seoul. (Yonhap)

SEOUL, Feb. 2 (Korea Bizwire)South Korea’s sovereign wealth fund said Tuesday it earned US$21.8 billion from investment, boosted by stock rallies, as the coronavirus pandemic prompted central banks to cut rates and pump liquidity into markets.

Choi Hee-nam, chief executive of Korea Investment Corp. (KIC), told reporters that its return on investment was 13.7 percent last year, compared with 15.39 percent in 2019.

It marked the second straight year that the KIC posted a double-digit return on investment.

Over the past two years, the KIC earned a total of $42 billion in return on investment, accounting for about 60 percent of its total return since 2006.

To cushion the economic impact of the coronavirus outbreaks, central banks around the world have taken a series of drastic measures to stabilize markets with a flood of money supply and record-low interest rates.

The excess liquidity has fueled surges in bond and stock prices.

As the pandemic showed little signs of easing, however, Choi said prospects of a long-term return on investment are declining.

This year, the KIC will bolster its investments in the environment, while reviewing measures to cut investments in coal, Choi said.

Shortly after taking the helm at KIC in March 2018, Choi announced plans to raise the ratio of alternative assets in its portfolio to 19 percent by 2020.

South Korea established the KIC in July 2005 as part of its plans to boost sovereign wealth and help prop up the local financial industry. It manages assets entrusted by the government and the central Bank of Korea.


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