NPS Could Raise Allocation of Korean Stocks = KOSPI to 5,000 Soon
One of the biggest stories in the Korean stock market in the past several weeks has been the discussions about NPS potentially increasing the allocation of Korean stocks.
If NPS announces a meaningful increase in the allocation of Korean stocks for its AUM, then there could certainly be an acceleration to KOSPI reaching 5,000.
Based on what we have gathered so far, there is a higher probability (70-80%) that NPS meaningfully increases the allocation of Korean stocks in the next several
months.
NPS - Domestic Equity Investments
The chart below shows the amount of domestic equity investments by the NPS as well as the contribution of the domestic equity investments as a percentage of total AUM. The amount of domestic equity investments peaked in August 2025 at 196.3 trillion won, reaching 14.8% of total AUM. However, the percentage of AUM figure is down sharply from 21.2% at the end of 2020 when it reached 176.7 trillion won.
Source: NPS
“Winning Begets Winning”
The Korean stock market has been on a super bull run this year. KOSPI is up 69.8% YTD to 4,073, sharply outperforming other major global stock indices such as S&P500 (up 14.4% YTD). Amid this rally, one of the biggest stories in the Korean stock market in the past several weeks has been the discussions about Korea’s NPS (National Pension Service) potentially increasing the allocation to Korean stocks.
Now, KOSPI is only 23% away from reaching 5,000. If NPS announces a meaningful increase in the allocation of Korean stocks to its AUM, then there could certainly be an acceleration to KOSPI reaching 5,000.
NPS has not officially stated what it will do with regards to potential change in the allocation of Korean stocks. Nonetheless, based on what we have gathered so far, there is a higher probability (70-80%) that NPS meaningfully increases the allocation of Korean stocks in the next several months.
