[Edaily Marketin JI YEONG-EUI Reporter] Market expectations and pressures surrounding the National Pension Service (NPS) continue, with calls for the NPS to refrain from selling when the KOSPI rises and to act as a buffer for the index when the market falls. As the market’s contradictory attitude—calling on the NPS to be both the cause and the solution depending on the stock market’s direction—repeats itself, the head of the NPS has stepped forward to draw a clear line, stating that propping up the stock market is not the purpose of fund management.

According to the financial investment industry on the 22nd, Kim Seong-ju, Chairman of the National Pension Service (NPS), posted a message titled “Is It All About the National Pension Service?” on his social media the previous day, emphasizing, “The National Pension Service’s investments are not intended to prop up the stock market or defend stock prices, nor are they meant to serve as a safety net or amplifier for the market.”

Chairman Kim stressed, “The National Pension Service is an institution that manages retirement funds in accordance with six core principles, including profitability, stability, and public interest,” adding, “The essence of our fund management is to generate sustainable returns through long-term, diversified investments in various domestic and international assets and to return those returns to the public in the form of retirement pensions.”

He continued, “In particular, even amid high volatility like we’re seeing now, with the market fluctuating sharply, we are not swayed by short-term fluctuations but are adhering to our investment principles based on a long-term perspective and a patient approach as long-term investors,” adding, “The National Pension Service is not an institution that invests based on short-term market movements; it is a pension fund that pursues long-term returns for the public’s retirement.”

Chairman Kim concluded his post by stating, “The role of the National Pension Service is not to move the market, but to generate long-term returns for the public’s retirement.”

This is the second time this month that Chairman Kim has publicly stated the NPS’s position regarding market demands surrounding its domestic stock portfolio management. Earlier, on the 1st, he personally refuted the “74 trillion won sell-off bomb” theory raised by some in the securities industry, calling it a “preposterous figure.”

The National Pension Service resumed the rebalancing of its domestic stock portfolio—which had been temporarily suspended in January due to market volatility—in July. Although the Fund Management Committee revised the rebalancing rules in May to allow for a gradual implementation, concerns persisted in some market circles about the potential for massive selling pressure resulting from the rise in the KOSPI.

At the time, Chairman Kim explained, “Literally, ‘rebalancing’ means readjustment,” adding, “If you think of a scale or a seesaw, when one side is too heavy or too light and the balance is off, you have to remove a little from the heavy side or add a little to the light side to restore balance.” He went on to emphasize, “If you remove too much at once because one side is too heavy, the balance will be thrown off again, so it must be done gradually and precisely. That is why rebalancing cannot result in large-scale selling in the short term.”

He also explained, “The National Pension Service’s rebalancing strategy is determined by considering not only stock prices but also various other factors, such as the returns on bonds and alternative assets, stock price volatility, interest rates, and exchange rates.” He added emphatically, “We are not an institution that immediately sells to lock in profits when prices rise or immediately buys when they fall.”

The reason the head of the National Pension Service has been unusually vocal in defending the fund appears to stem from the market’s perception of the National Pension Service as a tool for constantly propping up the stock market. As stock market volatility recently increased, market attention quickly shifted from concerns over the National Pension Service’s selling volume to speculation about its capacity for additional purchases. At the time of the announcement to resume rebalancing, the market had been pressuring the fund to refrain from selling; however, once the market entered a downturn, it brought up the “rescue pitcher theory,” expecting the fund to prop up the index. Observers note that this once again reveals the market’s opportunistic demand to use the National Pension Service as a tool to prop up the stock market or defend the index, regardless of whether the market is rising or falling.

Pension fund experts point out that demanding an active role from the National Pension Service based on market conditions is an approach that ignores the fundamental nature of fund management. They analyze that the underlying mindset—expecting the National Pension Service to prop up or manage the stock market depending on the situation—remains consistent: during bull markets, rebalancing sales are identified as obstacles to market gains, while during bear markets, the fund is expected to inject capital to defend the index.

The National Pension Service is a long-term investment institution with a diversified portfolio that includes not only domestic stocks but also foreign stocks, bonds, and alternative investments. If artificial trading is repeatedly carried out for the purpose of short-term index defense, it will undermine medium- to long-term asset allocation strategies and inevitably place a burden on the risk and return management system of the entire portfolio. Critics argue that calls to use the pension fund as a tool to prop up the stock market—citing short-term market gains or index management—could infringe upon the fund’s operational independence and undermine the long-term profitability of citizens’ retirement savings.

Stock market experts point out that, regardless of the influence the National Pension Service’s trading volume has on the stock market, the responsibility to mitigate market shocks must be strictly distinguished from the responsibility to prop up the market.

One capital markets expert suggested, “The National Pension Service is not a defensive fund designed to maintain a specific index level, but rather a long-term asset management institution tasked with safeguarding subscribers’ retirement security,” adding, “It must break free from market pressures to evaluate the fund based on short-term net buying volumes or its role in defending the KOSPI, and instead ensure its independence by focusing on long-term returns and risk management capabilities.”