ETFs tracking the South Korean market rose collectively. As of writing, CSOP Hang Seng Korea Technology ETF (03431) gained 4.08% to HKD 11.73; TR Korea ETF (02848) increased by 2.87% to HKD 2022; and Samsung Hang Seng Global Semiconductor ETF (03132) advanced 2.72% to HKD 67.86.
The move follows market reports on May 28 indicating that South Korea's state-run pension fund has decided to raise its domestic stock allocation target amid a strong local equity market performance, fueled by the global artificial intelligence boom. South Korea's welfare ministry stated on Thursday that the National Pension Service (NPS), the world's third-largest pension fund, has set its domestic equity allocation target at 20.8% by the end of 2026, up from the previous target of 14.9%. The ministry announced this decision following a portfolio review.
Reports suggest that with the surge in the South Korean stock market, the fund's holdings of local stocks have already exceeded the target level. Authorities aim to alleviate downward pressure on the Korean won caused by the fund's overseas investments. Consequently, in January of this year, the original target of 14.4%, which was set to be reviewed in May 2025, was revised upward to the 2026 year-end target.
Barclays analysts noted that, given the ongoing boom in South Korean semiconductor exports, which is expected to persist for another two to three years, the NPS may be inclined to maintain such upside exposure.
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