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South Korean losses drive pensions to U.S.

South Koreas biggest pension funds are cutting holdings of local debt to buy stocks in the U.S. and Europe, saying the days when the Asian nation could be counted on to outperform developed markets are in the past.

By Jiyeun Lee and Sharon Cho | Updated on April 01, 2014

April 1 (Bloomberg) — South Korea’s biggest pension funds are cutting holdings of local debt to buy stocks in the U.S. and Europe, saying the days when the Asian nation could be counted on to outperform developed markets are in the past.

Both Korea Teachers’ Pension and Government Employees Pension Service plan to reduce domestic notes to below 50 percent of assets in 2014 and add developed-world equities, managers of the funds say. South Korea’s government bonds returned 1.3 percent this year, trailing all Asian markets except the Philippines, and the won slid 1 percent versus the dollar, data compiled by Bloomberg show. The Kospi stock index fell 1.2 percent, while the MSCI World Index rose 0.7 percent.

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