Korea’s sovereign fund posted $28.4 billion in losses in the first eight months of this year as global stock and bond markets suffered turmoil, and the fast-weakening local currency resulted in a decline in the valuation of its offshore holdings, its chief said Wednesday.
In a parliamentary audit, Jin Seung-ho, head of the Korea Investment Corporation (KIC), said the fund’s return on investment had declined to minus 13.87 percent as of end-August. Of note, its return on investment in such traditional assets as stocks and bonds fell 16.85 percent over the cited period.
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The tumble in profits comes as global stock and bond markets have sharply declined on worries over aggressive monetary tightening in major countries and growing possibility of a global economic slowdown.
The won’s fast slide against the dollar has also led to a decline in the converted value of its overseas asset holdings.
“We are managing our portfolio through stress tests and risk analysis on assets in a way to actively respond to market volatility,” Jin told lawmakers.
KIC said it still has posted a cumulative profit of around $59.5 billion since its launch in 2005.
It currently handles $117.1 billion worth of assets around the world. The money has been commissioned by the government and the Bank of Korea, the country’s central bank, for investment. (Yonhap)
