KIC’s 2016 investment return swings to positive

  • 2017-05-13

Korea Investment Corporation’s (KIC) investment return swung to a positive 4.35% in 2016, helped by solid returns from stock and bond portfolios.

In 2015, the sovereign wealth fund reported a negative 3.0% return, its worst performance in four years because of poor performance of traditional assets.

Traditional assets yielded 3.96% on average: 5.85% from stocks and 1.46% from bonds. In 2015, they posted a negative 3.15%.

Alternative investments, including real estate, infrastructure, private equity and hedge funds, generate an annualized return of 6.57% last year, KIC said in a statement on May 12. It began investing in such asset classes in 2009.

The annualized return from alternatives was steady from the previous year’s 6.78%.

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KIC earned $4 billion in investment income last year, and its assets under management increased to $110.8 billion at end-2016.

KIC manages $95 billion entrusted by South Korea’s finance ministry and the Bank of Korea.

Its cumulative investment incomes amounted to $15.8 billion, since its establishment in 2005.

KIC’s assets consisted of stocks (41.2%), bonds (33.0%), alternatives (13.7%), equity stake in Bank of America (1.4%) and others (10.7%) at the end of last year.

By Chang Jae Yoo

yoocool@hankyung.com

<Edited by Yeonhee Kim>