South Korea’s national pension fund will continue to raise the ratio of risky assets and increase alternative investments, the welfare ministry said on Friday.

The ministry announced this in a statement after an annual review of five-year portfolio management plans, at which it kept target ratios for each asset class and target investment returns, unchanged from the previous year.

By end-2029, the National Pension Service (NPS) will allocate 55% of its total assets to stocks, 30% to bonds, and 15% to alternative investments, with the investment earnings target for the next five years set at 5.4%, according to the ministry.

“Asset allocation targets are determined with the aim of maximising long-term earnings within the given risk limit and in consideration of market impact from the fund management,” the ministry said.

Earlier this month, the board governing the NPS’s investment strategies introduced a new long-term rule of investing 65% of total funds in risky assets.

The world’s third-largest pension fund has been increasing investments in risky and overseas assets for higher returns to delay the depletion of the fund, currently expected in 2055 due to a fast-ageing population.

By end-2025, the NPS plans to hold 14.9% of its assets in domestic stocks, 35.9% in foreign stocks, 26.5% in domestic bonds, 8.0% in foreign bonds and 14.7% in alternative assets.

The NPS held a total of 1,101.3 trillion won ($794.65 billion) in assets as of the end of March, with 47.5% of the total in stocks, 36.7% in bonds and 15.8% in non-traditional assets.

Reuters