National Pension Service Chairman Kim Seong-ju posted on social media July 21 stating NPS investments do not aim to prop up Korean stocks or defend index levels, marking his second public defense this month against market pressure. Kim emphasized NPS operates as a long-term institutional investor focused on sustainable returns for retirees, not short-term market movements. The statement responds to contradictory market expectations that alternately demand NPS refrain from selling during rallies and provide index support during downturns, as KOSPI volatility intensified in recent weeks.
Kim Seong-ju Emphasizes Long-Term Investment Principles in SNS Post
In a post titled "Everything Leads to National Pension Service?" Kim stated NPS investments are "not for stock market support or share price defense, nor to serve as a market safety net or amplifier." He explained NPS operates under six principles including profitability, stability, and public interest, managing retirement funds through long-term diversified investment across domestic and foreign assets. Kim wrote NPS maintains investment discipline "based on long-term perspective and sustained breath as a long-term investor, without being swayed by high volatility where markets fluctuate significantly like these days." He concluded by stating NPS's role "is not to move markets but to generate long-term returns for citizens' retirement."
NPS Chairman Previously Refuted Large-Scale Sell-Off Theory on July 1
This marks Kim's second public statement this month addressing market concerns over NPS domestic stock operations. On July 1, he directly refuted claims of a "74 trillion won sell-off bomb" circulating in securities industry circles, calling the figure "absurd." NPS resumed domestic stock rebalancing in July after temporarily suspending it in January due to market volatility. The fund management committee revised rebalancing rules in May to implement adjustments gradually. Kim explained at that time that rebalancing involves "readjustment"—comparing it to balancing scales by "removing a little from the heavy side or adding a little to the light side." He emphasized "rebalancing cannot be large-scale selling in a short period" because removing too much would create imbalance again, requiring "precise, gradual adjustments." Kim added NPS rebalancing strategy "considers not only stock price levels but returns of other assets like bonds and alternatives, stock volatility, interest rates, exchange rates, and various other factors."
Market Alternates Between Sell-Off Fears and Rescue Expectations
According to financial investment industry sources on July 22, market attention rapidly shifted from concerns over NPS selling volume to expectations for additional buying capacity as stock market volatility expanded recently. The same market participants who pressured NPS to refrain from selling when rebalancing resumption was announced began invoking "rescue pitcher theory" expecting NPS to support index levels once markets entered a downturn. This pattern reveals what analysts characterize as opportunistic demands treating NPS as a market support or index defense tool regardless of whether stocks rise or fall. Pension fund experts note that expecting active intervention based on market conditions ignores the fundamental purpose of fund management—labeling NPS rebalancing sales as obstacles during rallies while expecting capital injection for index defense during declines reflects identical underlying assumptions about NPS serving market support or management functions.
Experts Warn Against Treating NPS as Short-Term Market Stabilization Tool
NPS maintains a diversified portfolio across domestic stocks, foreign stocks, bonds, and alternative investments as a long-term institutional investor. Repeated artificial trading for short-term index defense would disrupt medium- to long-term asset allocation strategy and burden the entire portfolio's risk-return management system. Critics argue that demands to use pension funds as market support tools based on short-term market gains or index management infringe on fund management independence and could harm long-term profitability of citizens' retirement assets. One capital market expert stated "NPS is not an index-defense fund protecting specific levels but a long-term asset management institution protecting subscribers' retirement," recommending "independence should be guaranteed by evaluating NPS based on long-term returns and risk management capabilities rather than forcing assessments based on short-term net buying volume or KOSPI defense."
FAQ
What did NPS Chairman Kim Seong-ju say on July 21 about the pension fund's investment purpose?
Kim posted on social media that NPS investments do not aim to prop up stock markets or defend share prices, emphasizing the fund operates as a long-term investor focused on sustainable returns for retirees rather than short-term market movements.
Why did Kim Seong-ju issue his second public statement this month defending NPS operations?
Kim responded to contradictory market expectations that demand NPS refrain from selling during stock rallies but provide index support during downturns, as market participants alternately treated the pension fund as either a threat or rescue mechanism depending on KOSPI direction.
