Japan pension funds raise alternatives exposure to record high in 2017 survey finds
Japanese pension funds raised their allocation to alternative investments to a record 17.1% of total assets last year in a bid to boost returns, according to findings from a survey by JP Morgan Asset Management (JPMAM). At the same time, their allocation to Japanese government bonds (JGBs) declined to an all-time low as the central bank’s prolonged negative interest rate took a toll on return targets.
JPMAM polled 123 Japanese defined-benefit pension funds and mutual aid pension funds between March and June this year for their asset allocation strategies.
Their average alternative position has climbed “considerably” from 11.4% in 2013 and over half the respondents, or 59.2%, “intend to further increase their allocation to alternatives over the next year”, the company says in a statement on July 9.
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