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NPS beefs up US equities exposure to $43.9b

By Son Ji-hyoung
Published : Feb 22, 2021 - 14:32
Updated : Feb 22, 2021 - 16:42

An exterior view of National Pension Services headquarters in Jeonju, North Jeolla Province. (Yonhap)

South Korea‘s public pension fund, the National Pension Service, has boosted its United States stock exposure to $43.9 billion in the fourth quarter of 2020, a US filing showed Monday.

The world’s third-largest pension fund, which was managing 807.3 trillion won ($729 billion) of assets as of November, saw its US stock exposure rise by $5.8 billion over the October-December period of 2020, according to its filing to the US Securities and Exchange Commission.

The filing also showed NPS was holding a minority stake in 484 listed companies and products in the US stock exchanges, having sole investment discretion.

Among the issuers, NPS had its biggest US stock holdings by value in gadget maker Apple, computer software firm Microsoft, e-commerce company Amazon, Google‘s parent company Alphabet and electric vehicle maker Tesla.

There were 12 new entries to the list in the fourth quarter, as NPS net bought a $48.8 million stake in TV streaming services firm Roku and a $43.3 million stake in indoor exercise bike maker Peloton Interactive. The pension fund also net purchased shares worth $43.1 million of cybersecurity firm CrowdStrike and worth $42.6 million worth of social media service company Pinterest.

NPS also increased its bets on tech giants such as Microsoft and Amazon, financial firms Charles Schwab, Morgan Stanley, Wells Fargo, JPMorgan & Chase, pharmaceutical company Pfizer, as well as clean energy firms NextEra Energy and AES.

The disclosure showed that NPS had partially cut its tech exposure to cash in its returns. NPS divested 12,700 shares in Apple and 5,600 shares in Tesla. By contrast, the value of NPS equity holding in Apple and Tesla jumped by $357.2 million and by $255 million, respectively.

NPS also divested shares in Ford Motor, Oracle, NortonLifeLock, Teva Pharmaceutical, the filing also showed.

NPS in 2019 vowed to expand its exposure to foreign assets -- traditional and alternative combined -- to 50 percent of AUM by 2024 and to gradually ditch passive investing in foreign equity investment, amid its push to exceed 1,000 trillion won by total AUM.

As of November, NPS was holding 188.2 trillion won worth of shares worldwide, outside of Korea, or 23 percent of its total assets under management. The foreign stock holding denominated in Korean currency increased more than twofold compared to end-2016.

Foreign shares gained 13.08 percent in US dollar-denominated return during the January-November period, outperforming its benchmark MSCI ACWI ex-Korea by 1.22 percentage points.

By Son Ji-hyoung (consnow@heraldcorp.com)

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