Korea Investment Corporation Returns -14.4 Percent for 2022
Posted on 02/15/2023
Many sovereign wealth funds experienced negative returns in their fixed income portfolios in 2022 as they were unprepared for a world of rising interest rates. The Korea Investment Corporation (KIC), South Korea’s sovereign wealth fund, experienced its biggest annual loss last year since its inception in 2005
KIC generated negative returns in both equities (-19.3% annual return) and bonds (-16.7% annual return). The annualized return was negative 14.4%, the worst percentage since 2008. KIC’s asset under management worth US$ 205 billion at the end of 2021, plummeted to US$ 169.3 billion at the end-2022. KIC increased exposure to alternative investment by 540 basis points in 2022, while reducing it to traditional assets by 230 to 340 basis points.
At the end of 2022, KIC had allocation of 38.3% to equities, 31.5% to fixed income, and 22.9% to alternatives which includes private equity, infrastructure, and real estate.