Are you surprised by the anger of a single Donghak ant… National Pension K shares do not sell more

The National Pension Plan plans to stop the domestic stock sale march. Although the National Pension Service sold 15 trillion won worth of domestic stocks this year in order to adjust its assets, it received strong criticism from individual investors called’Donghak ants’. If the National Pension Service no longer places orders to sell, it is expected to be of considerable help to the supply and demand of the stock market.

According to related ministries and the securities industry on the 24th, the National Pension Fund Management Committee will discuss an asset adjustment agenda related to the share of domestic stocks held on the 26th. The main content is to widen the target range of domestic stock holdings, which is currently 14.8~18.8%, to 13.3~20.3%. An official from the Fund Management Committee said, “Most of the members, including employers and worker representatives, as well as government members, agree,” and said, “The atmosphere will pass smoothly at the meeting on the 26th.”

As of the end of last year, the national pension’s assets under management amounted to 83.3 trillion won, and domestic stock holdings amounted to 17.6 trillion won (21.2%). As the stock price rose sharply last year, it exceeded the domestic stock target range of 18.8%. For this reason, it has sold 15 trillion won worth of stocks only this year, and it is also observed that it will sell an additional 15 trillion won to meet the middle of the target range of 16.8%.

The sale of the national pension has provoked a backlash from Donghak ants who are constantly buying domestic stocks. On the Cheongwadae National Petition Bulletin, there are a lot of articles asking for the national pension to be filled and forbidden to sell. As a result, it is reported that the National Pension Service felt a considerable burden. Some say that the government is pressing the national pension system ahead of the re-election next month.

Fund management plans to process asset adjustment agenda on the 26th
Ants come up to the petition for “Dismantle the main culprit of falling stock prices”

The National Pension Service continued to sell in the securities market for 51 trading days from December 24 last year to the 11th of this month. Since then, it has been net buying for a few days, but it is continuing net selling again. Until the 23rd, in less than three months this year, the number of domestic stocks sold by pension funds was 15,534.8 billion won, more than four times the net sales volume (3,4192 billion won) last year. The securities industry estimates that most of these were sold by the National Pension Service.

The National Pension Plan felt burdened by Donghak ants backlash

The reason that the National Pension Service sells domestic stocks is due to its asset allocation strategy. National pension funds invested in domestic and foreign stocks, bonds, and real estate are managed so that the invested money is not concentrated on one of the assets. As it is impossible to fully predict the risk of the market, the goal is to minimize the negative impact on the overall fund management amount even if a specific asset market is in trouble.

The target ratio of domestic stocks to the total assets under management of the National Pension Service is 16.8%. However, you can hold more or less as much as 5% points here. It reflects the characteristics of the asset market, where the valuation value is constantly changing. It is also the reason that the share of domestic stocks in the national pension reached 21.2% at the end of last year. However, the national pension managers are obligated to manage the proportion of domestic stocks not exceeding the target by 2 percentage points. If it deviates from this, the reason must be reported to the Fund Management Committee. The agenda proposed by the Fund Management Committee on the 26th is to expand this range to 3.5 percentage points. It does not matter if the national pension contains up to 20.3% of domestic stocks, and there is no need to sell additional domestic stocks.

This change in strategy is analyzed because of the backlash of individual investors called’Donghak ants’. In addition to the global interest rate hike and other bad news, the sales volume of the national pension became a burden for the KOSPI index to rise further, so Donghak ants have continuously requested changes in the investment strategy of the national pension. Since last month, the Cheong Wa Dae public petition bulletin board posted thousands of comments such as,’Stop selling domestic stocks for the national pension right away’,’Dismantle the Fund Management Headquarters, the main culprit of the stock price decline,”Explain the reasons for the mass sale’, etc. .

On the 4th, the Korea Equity Investors Association, an individual investor group, held a demonstration in Jeonju, Jeonbuk, where the headquarters of the National Pension Service is located. They condemned that “the continuous selling behavior of dropping from the damn box blood and pouring cold ice water into the domestic stock market after 13 years is an obvious betrayal of Donghak ants.” Institutional investors also raised the question. An official from an asset management company criticized, “The market structure has changed, and selling stocks using the past strategy will negatively affect the return on the National Pension Plan.”

The opposite voice is also difficult

As such controversy spread to the political world, Minister of Health and Welfare Kwon Deok-cheol attended the National Assembly last month and said, “The fund management headquarters will review the issue of asset allocation.” Minister Kwon is also the chairman of the Fund Management Committee. In addition, it is reported that some fund management committee members also raised the need to discuss the agenda at a meeting last month.

However, experts in management inside and outside the national pension are raising the question of changing the standard of asset allocation. Experts from the Investment Policy Specialized Committee and the Practical Evaluation Committee, who review the agenda presented to the Fund Management Committee in advance, are said to have objected to the agenda. On the 17th, the Investment Policy Specialist Committee posted an opinion to the Fund Management Committee saying, “There is no reason to change the range of domestic stock holdings. On the 24th, the Practical Evaluation Committee also drew attention that “the decision should be made after the results of related research services are available.”

Another problem is that it contradicts the mid- to long-term asset management strategy laid out by the National Pension Service. In May of last year, the National Pension Plan decided to reduce the share of domestic stocks to 15% by 2025 in the mid-term asset allocation plan. An official who is bright with the situation of the national pension said, “Considering the decrease in the amount of national pension management due to the increase in retirement population, selling of domestic stocks is inevitable anyway.”

There are also reports that the politics and the government are pressing the national pension system ahead of the re-election on the 7th of next month. An official from the capital market said, “The adjustment of the range of the proportion of ownership is correct, and the national pension needs to independently establish a strategy without noticing the politicians.”

Reporter Noh Gyeong-mok/Hwang Jung-hwan [email protected]