Korean pension fund NPS increases holdings in U.S big tech stocks in Q1

Korea’s largest institutional investor National Pension Service (NPS) cherry-picked big tech stocks in the U.S. while offloading ETFs tracking the S&P 500 in the first quarter, data showed.

NPS held $47.8 billion worth of U.S-listed stocks as of the end of March, up 8.98 percent from three months earlier, according to financial data tracker WhaleWisdom.

The pension fund increased stock holdings rather than taking profit in the first quarter. It newly invested in 27 stocks and increased investments in 335 stocks. Meanwhile, it fully unloaded five stocks and decreased ownership in 141 stocks.

The pension fund’s U.S. stock portfolio composition stayed about the same as three months ago with big tech stocks taking the bulk of it. Apple stock accounted the largest 5.33 percent of the portfolio, followed by Microsoft with 4.35 percent, PBUS ETF with 3.59 percent and Amazon 3.41 percent. Others in the pension fund’s top 10 holdings were Facebook (1.90 percent), IVV ETF (1.77 percent), Alphabet Class A (1.68 percent), Alphabet Class C (1.66 percent), Tesla (1.32 percent), and JP Morgan (1.18 percent).

NPS went on shopping spree on tech stocks in Nasdaq during the correction period in late March. The pension fund net purchased $75.63 million in Apple, $82.03 million in Microsoft, $84.78 million in Amazon, $20.65 million in Facebook, and $26.05 million in Tesla. The only tech stock within its top 50 holdings, excluding ETF, was Intel.

Its long-term investment strategy on U.S. tech stocks has played out well. Stock investment in Apple has yielded a cumulative return of 243.7 percent, Microsoft 177.4 percent, Amazon 168.9 percent, Facebook 108.2 percent, Alphabet Class C 122.9 percent and Alphabet Class A 135.8 percent.

In contrast, NPS cashed out ETFs tracking the S&P 500. It sold off all its shares in SPDR S&P 500 Trust ETF (SPY ETF) and Vanguard S&P 500 ETF (VOO), in which the pension fund had invested since the fourth quarter of 2015. The cumulative returns from its holdings in the two ETFs, worth around $1.8 billion, are estimated to be 71.1 percent and 56.7 percent, respectively.

This has left NPS’s investment in S&P 500 tracking ETF to iShares Core S&P 500 ETF (IVV) only.

Instead, the Korean pension fund bought $1.7 trillion worth of shares of Invesco PureBeta MSCI USA ETF (PBUS), which tracks the MSCI USA Index with a heavy focus on large- and mid- cap stocks.

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