South Korea‘s largest institutional investor the National Pension Service gained 2.35 percent in January from its allocation, its preliminary data showed Wednesday.

The monthly disclosure also showed that the NPS, the world’s third-largest pension fund, has slightly cut its stock weighting from December 2020, indicating that the pension fund’s rebalancing effort continued against the backdrop of the record bull run in domestic bourses.

Of the total 855.3 trillion won ($756.2 billion) in assets, the NPS had deployed 21 percent of assets to domestic stocks in January, 0.2 percentage point lower than the previous month.

NPS has practically led local pension funds’ selling spree on the domestic stock market, triggering a net capital outflow of 8.4 trillion won in January and 16.2 trillion won in the first quarter. Market watchers have speculated that the selling spree was aimed at achieving its goal to cut its domestic stock exposure in accordance with the midterm investment plan.

Meanwhile, the NPS earned a financial return across all asset classes in January.

The public pension fund returned 5.24 percent from domestic equities and 3.98 percent from foreign equities. The pension fund also took 2.01 percent return from foreign fixed-income products and 1.86 percent gain from alternative assets.

The NPS said its allocation to foreign assets led to extra gains because of the strengthened dollar against the Korean won.

The NPS disclosure also showed that it earned 5.75 trillion won in January, as its financial returns and contributions outsized pension payments.

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