Japan pension fund to invest in emerging market equities

  • Business
  • Wednesday, 13 Oct 2010

TOKYO: Japan’s public pension fund, the world’s largest, has issued a tender to select fund managers for planned investments in emerging market equities, an official of the fund said yesterday.

This will mark the first time for the Government Pension Investment Fund (GPIF), which holds about US$1.4 trillion in assets, to take on exposure to emerging market equities, with the MSCI main emerging market stock index to serve as its benchmark, the official said.

The GPIF is a conservative investor which keeps more than two-thirds of its assets in Japanese government bonds.

“It’s difficult to say how much we’ll invest (in emerging markets). We are not thinking of investing a large amount. We’re just planning on small amounts,” he said.

The tender will close on Dec 10 but the GPIF did not say when it would announce the result. The official said he was not sure how long the selection process for fund managers would take or how many managers the public fund would pick.

As of June, about 9% of the GPIF’s total assets, or 10.6 trillion yen (US$129.2bil) out of 116.8 trillion yen, were held in foreign equities.

The GPIF’s portfolio target calls for a 67% allocation to domestic bonds, 11% to domestic stocks, 9% to foreign stocks, 8% to foreign bonds and 5% to short term assets. — Reuters

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