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SEOUL - SOUTH Korea will invest about 11 billion US dollars (S$16 billion) from its national pension fund in overseas stocks next year as part of efforts to boost returns, officials said on Thursday.
A state agency which manages the fund will invest 10.35 trillion won (S$16 billion) in foreign stocks next year, up from 5.4 trillion won this year, the health and welfare ministry said.
At the end of November, the agency owned 17.4 trillion won worth of overseas bonds.
The fund, the country's biggest institutional investor with assets estimated at 224 trillion won, has usually invested in bonds and local stocks.
But fund managers have been under pressure to diversify investment for higher returns given the nation's ageing society.
A government report in October estimated that the fund would dry up in 2060 due to rising pension payments.
The agency will hedge 70 percent of its investment in overseas stocks against foreign exchange risks next year, 60 percent in 2009 and 50 percent in 2010, the ministry said.
'The change is aimed at expediting the fund's investment abroad,' it said in a statement.
Next year the pensions agency plans to invest 15.8 trillion won in the local stock market and 20 trillion won in the development of overseas oil, gas and mineral resources. -- AFP
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