**Stock Market Yields 19%; Bonds Slow; Alternative Assets Show 8% Annualized Returns; Total Annual Returns Reach 24% When Converted to KRW**
Last year, Korea Investment Corporation (KIC) achieved an annual return of 8.49%, with assets under management (AUM) reaching an all-time high of $206.5 billion (approximately 304 trillion KRW).
On the 28th, KIC announced its operating results. The annual return on traditional assets (stocks and bonds) was 9.30%, with stocks yielding 18.83% and bonds -0.19%. Alternative assets, including private equity, real estate, infrastructure, and hedge funds, posted a 7-year annualized return of 8.06% from 2018 to 2024, with a cumulative annualized return of 7.68% since the initial investment. Over seven years, individual asset classes recorded annualized returns of 12.20% for private equity, 5.46% for real estate and infrastructure, and 5.80% for hedge funds. The investment proportions were 78.1% for traditional assets and 21.9% for alternative assets.
Last year, despite inflation concerns, global stock markets continued to rise, driven by the growth of innovative companies, especially in AI. KIC stated, “Amid persistent market volatility, we mitigated volatility in stock operation performance through detailed management strategies and risk management from a portfolio perspective. We improved fund management systems across global, North American, and Asian regions, and enhanced sector expertise to achieve double-digit absolute returns and a relative return of +10 basis points (1 bp = 0.01%) in stock operations.”
In the bond market, uncertainty regarding the extent and pace of interest rate cuts by major countries kept volatility high. KIC managed to exceed the benchmark by 2 basis points through adjustments in the long and short positions and sector allocation strategies. The overall relative return on traditional assets was +3 basis points.
For alternative assets, KIC continued to expand its portfolio in line with medium- to long-term asset allocation strategies. Last year, the net asset value (NAV) of alternative assets increased by $3.5 billion from the previous year, reaching $45.2 billion.
These returns are all calculated in US dollars. When measured in the local currencies of the countries invested in, the annual return last year rises to 10.80%. When converting the total profit to the Korean won, it soars to 23.68%.
Park Il-young, the President of KIC, commented, “This year, high uncertainty and volatility continue due to events such as the U.S. Trump administration’s tariff policy announcements, while AI technological innovations are accelerating, bringing both concerns and expectations to the market. We need to respond swiftly and calmly to volatility while making timely investments in areas expected to yield structural returns in the long-term to build a stable portfolio as a long-term investment institution.”