South Korea Pension Fund's Disclosed Stock Holdings Fall ₩182 Trillion as Chip Giants Sink

Two chipmakers account for nearly three quarters of the decline

South Korea's National Pension Service saw the estimated value of its disclosed stakes in 287 listed companies fall by ₩182.3963 trillion between June 30 and October 15, 2026. Samsung Electronics and SK Hynix accounted for ₩131.0971 trillion, or 71.8%, of that decline, putting the fund's dependence on two semiconductor giants at the center of a political dispute over how it manages retirement savings.

Financial data provider FnGuide put the holdings' combined value at ₩333.533 trillion on October 15, down from ₩515.9293 trillion at the end of June. The 35.3% fall means that roughly ₩35 of every ₩100 in the starting valuation disappeared over about three and a half months.

The figures cover companies in which the NPS disclosed ownership of at least 5% at either comparison date. They measure changes in the estimated market value of those holdings, including positions whose size changed as the fund bought or sold shares. Realized gains and losses are calculated separately when shares are sold.

The immediate policy debate concerns rebalancing, the process of adjusting investments to keep them near planned proportions. The fund suspended domestic stock rebalancing in January, raised its target allocation during the market rally, and resumed rebalancing on July 1. Its chairman says the pause prevented disruptive selling. Opposition lawmakers want a clearer explanation of the decision and its risks.

What the ₩182 trillion figure measures

FnGuide's comparison extends through October 15, beyond the September 30 end of the third quarter. Although the decline has been described as a record quarterly loss, the actual measurement covers June 30 to October 15. The reported reversal was the first since the fourth quarter of 2024.

The 287 companies form a combined group across the two dates. At the end of June, 270 companies met the 5% disclosure threshold; by October 15, 274 did. Some entered the group while others dropped below the threshold.

The NPS's own domestic stock disclosure gives a broader measure of its domestic equity assets: ₩418.558 trillion at the end of July 2026, or 24.9% of fund reserves. That figure covers the domestic stock asset class rather than only the companies selected for FnGuide's comparison.

For pension contributors, the practical issue is the value of assets held to support retirement payments. A falling share price reduces the current value of those assets even while the fund continues to own the shares. Future prices and the timing of sales affect the eventual investment result.

How Samsung and SK Hynix drove the fall

SK Hynix produced the largest decline in the comparison, with the estimated value of the NPS holding falling by ₩74.2261 trillion. Samsung Electronics followed with a decrease of ₩56.871 trillion. Together, they accounted for more than seven out of every ten won lost from the disclosed holdings' combined valuation.

SK Hynix shares fell from ₩2.65 million to ₩1.262 million, a drop of about 52.4%. Samsung Electronics shares declined from ₩334,000 to ₩210,000, or about 37.1%. As of October 15, the NPS owned 7.32% of SK Hynix and 7.84% of Samsung Electronics.

The fund had become more dependent on the two companies during the preceding rally. Their combined share of its domestic stock portfolio rose from 40.4% at the end of March to 55.7% by July 6, an increase of 15.3 percentage points. More than half of that portfolio was then tied to just two companies.

Samsung Electronics and SK Hynix had helped generate the earlier gains. Their growing weight also meant that a reversal in their share prices would have a larger effect on the pension fund. The same concentration that increased the benefit of rising prices increased the damage when prices fell.

Losses spread well beyond semiconductors

Across the 287 companies, 176 recorded decreases in the estimated value of NPS holdings, about 61.3% of the group. SK Square accounted for a decline of ₩10.8698 trillion, while Samsung Electro-Mechanics contributed another ₩7.5914 trillion.

Those two companies, together with Samsung Electronics and SK Hynix, accounted for about ₩149.56 trillion of the net decline, roughly 82% of the total. The comparison shows how a relatively small number of large positions dominated the result even though falling valuations were widespread.

Several holdings moved in the opposite direction. SK Innovation's estimated holding value increased by ₩904.1 billion as its share price rose from ₩94,900 to ₩155,000 and the NPS increased its ownership from 6.03% to 7.14%.

S-Oil added ₩710.7 billion, LG Energy Solution ₩580.8 billion and Hanwha Solutions ₩434.7 billion. Together with SK Innovation, those four gains totaled about ₩2.63 trillion. That was only about 2% of the combined decline in Samsung Electronics and SK Hynix, showing why the winners provided limited relief.

How the domestic stock allocation grew

The NPS's domestic equity target began at 14.4%, rose to 14.9% in January and reached 20.8% in May. Its actual domestic stock allocation climbed to 29.1% by the end of June, 8.3 percentage points above the revised target.

A target allocation is the planned share of a fund assigned to an investment category. The actual share changes with market prices as well as purchases and sales. When stocks rise faster than other assets, they can become a larger part of the fund even without additional buying.

The NPS's official figures show how much domestic stocks had already grown before the reversal. Their value rose from ₩139.722 trillion at the end of 2024 to ₩263.737 trillion at the end of 2025. Their share of total assets increased from 11.5% to 18.1% over that period.

The official portfolio breakdown for the end of 2025 put information technology at 40.6% of domestic equities and industrial companies at 23.0%. Together, those sectors represented 63.6%. By the end of July 2026, domestic equities accounted for 24.9% of reserves, down from the reported 29.1% allocation a month earlier.

The decisions behind the rebalancing dispute

The Fund Management Committee's decisions unfolded over several months, while both prices and the fund's investment targets were changing:

• January 26: The committee suspended domestic equity rebalancing.
• May: The domestic equity target rose to 20.8%, following January's increase to 14.9%.
• End of June: The suspension ended, with the actual domestic equity allocation at 29.1%.
• July 1: Domestic equity rebalancing resumed.
• October 14: NPS Chairman Kim Sung-joo defended the suspension at a parliamentary audit.
• October 15: FnGuide's holdings comparison reached its closing valuation date.
• December: Attention turns to the committee's next consideration of the domestic equity allocation.

Rebalancing would normally involve selling some assets that have grown beyond their planned share, or adjusting other investments to restore the intended balance. For a fund as large as the NPS, the pace of those transactions can also affect the market in which it trades.

Why the chairman defended the pause

NPS Chairman Kim Sung-joo told the National Assembly's Health and Welfare Committee on October 14 that following the existing rebalancing rules in January would have required heavy daily selling. He presented the suspension as a way to limit the shock to the stock market.

"If the Fund Management Committee had followed the rules in January without suspending rebalancing, we would have had to dump more than 800 billion won a day, more than 10% of KOSPI trading value, which would have delivered an enormous shock to the market," Kim said.

Kim linked that potential selling pressure to losses for both the fund and the public. People Power Party lawmakers instead challenged the consistency and transparency of the decision. Representative Kim Tae-ho questioned whether retirement interests or government preferences had guided it.

Representative Baek Jong-heon said the Korea Teachers Pension and Korea Post had reported no cases of suspending rebalancing because of market conditions during the preceding decade. He called for a fuller explanation from the NPS.

"The National Pension Service should explain more clearly to the public why it delayed and how it managed the risk," Baek said.

The dispute involves two competing pressures: reducing an increasingly concentrated investment position and avoiding sales large enough to push prices down. Criticism that the NPS failed to absorb foreign investor selling during the downturn adds another demand on the fund, to support the wider market while protecting retirement assets.

Which holdings the fund increased and reduced

The NPS increased its ownership in 84 companies and reduced it in 82 during the comparison period. GS Engineering & Construction saw one of the largest increases, from 7.82% to 12.88%. The fund's stake in Hyundai Marine & Fire Insurance rose from 9.42% to 12.37%, while Binggrae increased from 6.47% to 9.37%.

Hanwha, Korean Air and Naver also received larger allocations by ownership share, with increases of 1.92, 1.90 and 1.27 percentage points respectively. These changes show that the NPS continued selecting individual companies even as the combined valuation fell.

Paradise's stake declined from 12.33% to 8.39%, and Samsung Biologics fell from 10.27% to 6.56%. Mirae Asset Securities decreased from 7.23% to 6.19%, while Samsung Securities dropped from 13.36% to 12.15%.

Seventeen companies newly crossed the 5% disclosure threshold, including Zai S&D at 9.31%, PharmaResearch at 7.94%, DN Automotive at about 7.09%, Hanwha Solutions at 6.41% and Korea Zinc at 5.48%. Thirteen moved below it, including LG Display, Global Tax Free and Hans Biomed.

KOSDAQ reductions and the December decision

KOSDAQ companies appeared more frequently among ownership reductions than increases. Of the 82 companies where the NPS reduced its stake, 21 were listed on KOSDAQ. Only seven of the 84 companies receiving increases were on that market, including PharmaResearch, RF Materials and Doosan Tesna.

The fund reduced Daejoo Electronic Materials from 7.67% to 6.27% and cosmetics manufacturer Cosmecca Korea from 12.99% to 10.91%. Duksan Hi-Metal and OliX fell below the 5% disclosure threshold. Those changes followed purchases of KOSDAQ companies during the first half, amid government efforts to revive that market.

The next policy focus is the Fund Management Committee's December meeting and whether it will change the domestic equity target. No exact meeting date or final allocation decision has been announced in the information accompanying the losses.

For contributors, the key issue is how much of the retirement fund will remain exposed to domestic shares and to its largest companies. The NPS's official disclosure schedule also affects when a fuller picture becomes public: detailed asset class holdings at each year end are published in the third quarter of the following year under Article 25 of the National Pension Fund Management Guidelines and Article 39 of the Fund Management Regulations.

Key Points

• FnGuide estimated a ₩182.3963 trillion, or 35.3%, decline in disclosed NPS holdings between June 30 and October 15, 2026.
• Samsung Electronics and SK Hynix accounted for ₩131.0971 trillion, or 71.8%, of the decline.
• The comparison covered 287 companies meeting the 5% ownership threshold at either date; 176 recorded falling holding values.
• Domestic equity rebalancing was suspended on January 26 and resumed on July 1.
• NPS Chairman Kim Sung-joo defended the pause as protection against disruptive selling, while lawmakers challenged its transparency and risk management.
• The fund reduced ownership in 21 KOSDAQ companies and increased it in seven.
• Attention now turns to the Fund Management Committee's domestic equity allocation decision in December.