Stocks, Bonds, Gold All Fall — Investors Lose Safe Havens

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an 'AI-based customized news recommendation and summarization service' developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.

1. National Pension Service to Raise Currency Hedging Ratio to 15%

- Key Summary: The government is pushing to raise the National Pension Service's (NPS) strategic currency hedging ratio — fixing future exchange rates in advance to reduce foreign exchange risk — from the current 10% to 15%. The measure is being discussed at "New Framework," a consultative body involving the Ministry of Economy and Finance, the Ministry of Health and Welfare, the Bank of Korea (BOK), and the NPS. If the strategic hedging ratio rises to 15%, the NPS could hedge up to 20% of its foreign assets, potentially supplying tens of trillions of won worth of dollars to the foreign exchange market. However, opinions within the consultative body remain sharply divided, with the NPS expressing concern about deploying citizens' retirement funds to stabilize the foreign exchange market. Final implementation requires approval from the Fund Management Committee.

2. Gold, Bonds, Won All Tumble — No Refuge Left

- Key Summary: While the KOSPI plunged 19% over the past month, traditional safe assets including gold and bonds also fell in tandem, leaving investors with no safe haven. Six of the top 10 bond ETFs by net assets posted losses of up to 3.31%, and long-term bonds took an especially severe hit, with the "RISE Korea Treasury 30-Year Leveraged (Synthetic)" ETF plunging 13.48% in a single month. Domestic gold prices also fell nearly 6% from 239,300 won per gram on February 27 to 224,970 won, and the "KODEX 200 US Treasury Mixed" ETF — combining stocks and bonds — dropped 6% over one month. Securities firms are forecasting that broad-based asset pressure will be unavoidable unless geopolitical tensions ease or macroeconomic indicators reverse course during April.

3. One Month After Middle East Shock — Target Price Upgrade Reports Drop to One-Third

- Key Summary: In the month since the outbreak of the Middle East war, analyst reports upgrading target prices for domestically listed companies plunged 63% to 386 in March from 1,031 in the previous month. The KOSPI's 19.08% decline this month — the fourth-largest monthly drop on record — drove foreign investors to net sell 35.8749 trillion won in March, the largest monthly exodus ever recorded. Among the few stocks that still received target price upgrades were Samsung Electro-Mechanics (009150) with 14 reports, Samsung Electronics (005930) with 10, and APR (278470) with eight. Total market capitalization on the main KOSPI board has evaporated by more than 987 trillion won compared to pre-war levels. Meritz Securities analyzed that the reduced number of reports reflected both the increased variables from a prolonged war and seasonal factors ahead of quarterly earnings season.

4. Powell: "Investors Will Lose Money, But Private Credit Is Not a Systemic Crisis"

- Key Summary: Federal Reserve Chair Jerome Powell assessed that while investors may suffer losses from private credit — non-public loans provided directly to companies by institutional investors or private equity funds — it does not constitute a systemic crisis capable of shaking the entire financial system. Speaking at a Harvard University lecture on the 30th (local time), Powell stated that private credit accounts for a relatively small share of private assets and currently has no connection to the banking system. He also reaffirmed his stance of not immediately incorporating the economic impact of the U.S.-Iran war into monetary policy, given the uncertainty involved. Following his remarks, the probability of additional rate hikes by year-end on the CME FedWatch tool plunged from 24.6% the previous day to 3.1%.

5. Despite Ongoing Private Credit Concerns, U.S. Opens Door for 2 Kyung Won in Retirement Pensions

- Key Summary: The Donald Trump administration announced proposed regulations allowing managers of defined-contribution (DC) retirement plans, known as 401(k) plans, to invest in alternative assets including private credit funds. The U.S. Department of Labor will allow "safe harbor" provisions — shielding managers from legal liability — if they review six criteria including fund performance, liquidity, fees, and asset valuation. With total U.S. retirement pension reserves reaching $14.2 trillion (approximately 2,150 trillion won), attention is focused on the potential inflow of funds into the private credit market. However, experts predict it could take several years before the regulations have practical impact, as court precedents have yet to be established.

6. High-Risk TDFs to Be Screened Out — 'Eligibility Standards' Tightened This Month

- Key Summary: Starting in April, financial authorities will tighten eligibility standards for target-date funds (TDFs), capping investment exposure to any single foreign country at 80% and mandating minimum safe-asset holdings of 20% during the accumulation phase (the period of building assets) and 60% or more during the withdrawal phase (the period of drawing down assets). TDF net assets stood at 25.6 trillion won at the end of last year, surging 55% year-on-year, but some products had as much as 80.1% of assets concentrated in the U.S., highlighting a severe single-country concentration problem. TDFs that meet eligibility standards can be allocated up to 100% of retirement pension accounts — bypassing the usual 70% cap on risky assets — and can carry the "eligible" designation in their product names. In response to the regulatory changes, asset managers including Mirae Asset Global Investments are restructuring their portfolios from U.S.-centric structures to globally diversified investment frameworks.