The National Pension Fund, which surpassed 1,400 trillion won at the end of last year, is understood to have broken through 1,500 trillion won in just two weeks, riding on KOSPI’s rally, which broke all-time highs for 10 consecutive trading days.

According to investment banking (IB) industry sources on Jan. 15, the National Pension Fund’s asset management scale recently exceeded 1,500 trillion won. This represents an increase of nearly 30 trillion won this year from the provisional figure of approximately 1,473 trillion won at the end of last year. The National Pension Fund also increased by 260 trillion won last year thanks to the stock market bull run.

The background for the National Pension Fund’s rapid growth in scale is the continued strength of the stock market since the beginning of this year. According to Korea Exchange, the KOSPI index closed at 4,797.55 on jan. 15, up 74.45 points (1.58%) from the previous trading day. Only 202.45 points (4.21%) remain until the 5,000 points pledged by President Lee Jae Myung.

Despite overnight weakness in U.S. tech stocks, Samsung Electronics and SK Hynix rose together, boosted by Taiwan semiconductor company TSMC’s surprise performance. Samsung Electronics closed at 143,900 won, up 2.57% from the previous session, setting a new all-time high on a closing price basis. Among the top 10 KOSPI market cap stocks, all showed strength except for Doosan Enerbility (-0.11%) and SK Square (-1.38%). All top 10 KOSDAQ market cap stocks also closed higher.

Since pension funds mainly invest in KOSPI stocks, the fund size is analyzed to have grown due to index strength. The KOSPI index has risen for 10 consecutive trading days this year without a single decline. Starting with semiconductors, major domestic industries including automobiles, shipbuilding, defense, and nuclear power are taking turns leading the market in a rotational buying pattern. If it rises for three more trading days, it will tie the all-time longest streak record. The longest consecutive rise record is 13 trading days, achieved in 1984 and 2019.

However, as the domestic stock market shows strength, the National Pension’s additional buying capacity for domestic stocks is reportedly approaching its limits. Accordingly, the National Pension Fund Management Committee is expected to raise the domestic stock allocation around May this year. The fund committee plans to adjust stock allocation based on the World Economic Outlook report to be published by the International Monetary Fund (IMF) in April.

Securities firms cite upward revisions to KOSPI earnings forecasts as the reason why domestic markets are showing such particular strength. SK Securities estimated annual KOSPI operating profit at 300 trillion won last year, but significantly raised it to 474 trillion won for this year. This represents an estimated operating profit increase of nearly 56% compared to last year.

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