URGENT UPDATE: The Korea Investment Corporation (KIC) has just announced an impressive 11.73% return on investments as of the end of September 2023, fueled by a remarkable rally in US technology stocks. This surge positions KIC on track to potentially deliver its highest annual return since its inception in 2005.
With assets under management reaching $227.6 billion, an increase of $21.1 billion from the previous year, KIC is nearing its record annual gain of 13.7% achieved in 2020. This performance highlights the sovereign wealth fund’s ability to capitalize on market dynamics, raising expectations for an unprecedented annual return.
Traditional assets dominate KIC’s portfolio, accounting for 78.2% or $178 billion, with equities alone representing $94.6 billion. The 12.96% return on traditional assets has outperformed its benchmark by 24 basis points. Equities surged 18.74%, beating the benchmark by 15 basis points, while bonds rose 6.72%, outpacing benchmarks by 45 basis points.
KIC’s alternative investments, totaling $49.6 billion, have also contributed significantly. The annualized return over the past decade stands at 8.01%, driven by private equity at 11.9% and infrastructure at 10.53%. Hedge funds and real estate reported annualized returns of 5.13% and 3.91%, respectively.
Investment bankers emphasize that even if KIC’s performance remains stable through the fourth quarter, it could still achieve its best-ever annual return. “KIC could post its best-ever annual return even if performance remains flat in the fourth quarter,” said an investment banker. However, there are warnings to closely monitor potential volatility as the year draws to a close.
As KIC continues to embrace growth stocks, its strategic positioning could lead to substantial gains in an increasingly competitive investment landscape. Investors and stakeholders alike are closely watching these developments, as KIC’s performance could set benchmarks for sovereign wealth funds globally.
Stay tuned for more updates on KIC’s financial trajectory and the impact of the US tech market on global investments.
