Pension funds shift focus
Allianz Global Investors has released a report showing the four largest Asian pension reserve funds in China, Australia, Japan and South Korea are changing their governance and investment policies in an effort to maximise their returns, increasing their influence on the financial market.
The funds are retreating from public project financing and focusing on funds management, increasing their outsourcing to private asset managers by diversifying their investments and reforming the composition of their boards in an effort to increase professional governance structures and independence from governments.
Public pension reserve funds have traditionally been subject to political control and invested in low-return government projects such as infrastructure and housing loans.
The senior pensions analyst at Allianz, Alexander Boersch, said: “Demographic development requires investment in higher yielding assets. Given the ageing population, the capital of reserve funds is an important factor in smoothing contributions and the more efficient the risk-return profile, the less the burden on the public pension system.”
The report stated that the rising share of international and equity investments in reserve fund portfolios would increase the power of pension reserve funds in the financial markets. Their size will also bring issues such as internal governance, transparency and political influence into the “public spotlight”.
AUTHOR
By Levy
Recommended for you
Australian super funds have extended their winning streak into September, as strong global equities and resilient long-term returns boost member outcomes.
The super fund has appointed long-serving technology leader Richard Exton to its executive team, underscoring the fund’s digital transformation priorities.
Valuations of the major US tech companies are becoming elevated, according to UniSuper’s chief investment officer John Pearce, but not yet at bubble territory.
The country’s largest super fund has launched a £500 million UK housing platform to expand its living sector investments and support economic growth.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
215.17 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
118.15 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
75.00 3 y p.a(%)
4
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
61.11 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
60.93 3 y p.a(%)
