Comparison of the trading strategies and market impact costs of the National Pension Service's internal and external management

As of May 2022, the National Pension Service Korea is world's third-largest pension fund, with assets worth KRW912tn (approximately $US800bn). Of KRW152tn $US133bn) invested in domestic equities, 45% outsourced to external asset managers. Given absence prior research on Service's (NPS's) management method, this study analyzes its trading strategies and market impact according fund method from 2005 2022. The results are as follows: First, stock characteristics selected by internal using passive different those management, which various combined. Second, contrarian investment strategy, acts a stabilizer, characteristic pattern, while increases volatility does not improve liquidity. Third, there has been change strategy since 2016, when headquarters was relocated. This practically significant distinctive that it confirms differences between NPS's two methods terms impact.