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Sovereign wealth funds

KIC sees pre-pandemic level economic recovery as early as H2

Feb 26, 2021 (Gmt+09:00)

Gunung Lee, head of KIC's asset allocation (at left) and Sungil Kim, head of investment strategy (at right)
Gunung Lee, head of KIC's asset allocation (at left) and Sungil Kim, head of investment strategy (at right)

A senior investment manager of the Korea Investment Corporation (KIC) said on Thursday that the global economy may return to pre-pandemic levels later this year, supported by the fast rollout of COVID-19 vaccines and policy efforts around the world.

“If the global economy continues its recovery on the back of fast-paced vaccination, expansionary fiscal policies and accommodative monetary steps taken by governments," Gunung Lee, head of KIC's asset allocation group, told an online conference. "Then the global economy will likely return to the pre-pandemic level as early as the second half of this year." 

As downside factors, however, he cited earlier-than-expected policy normalization as a result of the quick economic recovery and a possibility of renewed US-China tensions, as well as investors stampeding into risky assets.

The conference was held with overseas investment managers of other Korean institutions. It is the country’s largest regular gathering of domestic institutional investors that began in 2014 to build networks and share ideas on global investments. They are comprised of 25 pension and retirement funds as well as cooperative federations, including Korea Post and the Government Employees Pension Service and Teachers’ Pension.

During the Feb. 25 conference, they shared outlooks for the economy and financial markets, as well as expressing their investment opinions, KIC said in a statement on Friday.

In a presentation for the online meeting, James Elliot, head of multi-asset investment at Cape Town-based manager Ninety One, said the global economy is expected to sustain steady growth this year, but market volatility may remain high, depending on how the global pandemic evolves.

Elliot advised the Korean institutional investors to invest in growth assets that stand to benefit from accommodative fiscal and monetary policies, while taking a close look at emerging markets such as China and other parts of Asia.

Last year, KIC gained 13.71% from investments, outperforming the National Pension Service's provisional return of 9.72% in the same year.

Write to Chang Jae Yoo at yoocool@hankyung.com

Yeonhee Kim edited this article.

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