The 5-3-3-2 rules for Japanese Employees' Pension Fund investments will be scrapped sometime in January, reported the Japan Bond Research Institute.
The JBRI said the move is being taken as early as possible and during Japan's 1997 fiscal year, which will end March 31, in order to revitalize the Japanese stock market. After the rules are abolished, EPFs will still have to abide by the current restriction that no more than half their assets can be managed by investment advisers - as opposed to trust banks and insurance companies - in Japan.
The existing 5-3-3-2 rule states that a minimum of 50% of an EPF's assets must be in ``safe'' principal guaranteed assets. But funds can invest only up to 30% in Japanese stocks, 30% in foreign securities, and a maximum of 20% in real estate.
Doris Duke Foundation, New York, is considering broadening its asset allocation with alternative investments in 1998.
Alan Altschuler, CFO of the $1.3 billion fund, said he is investigating private equity and hedge funds. No searches have been scheduled and no decisions on making an allocation to the asset class are expected until next summer, he added.
Cambridge Associates is assisting.
Great Manchester Pension Fund, Ashton-Under-Lyne, England, delayed by two months final decisions in its manager review, one of the biggest manager sweepstakes in England.
At stake are two £2 billion-plus (U.S.$3.3 billion) global balanced portfolios currently managed by PDFM and Prudential Portfolio Managers. A report will be submitted at a Feb. 20 trustees meeting, said Steven Taylor, principal investments officer for the nearly £5 billion (U.S.$8.2 billion) fund. A decision should be made at that time. One of the issues at stake is whether to hire two or three balanced managers, he said.
The Cement Masons Locals 886 and 404 pension plan will soon hire a new consultant. The fund is seeking a firm to replace Newport Evaluation Services. Newport resigned from the Toledo, Ohio-based pension fund, which has $50 million in assets.
Trustees are looking at candidates that were reviewed during an initial consultant search done about a year and a half ago. A source familiar with the fund would not release the names of finalists.
Board independence continued to grow at large U.S. companies in the past two years, but the trend has not caught on at many midcap and small-cap companies, according to a study from the Investor Responsibility Research Center. The study found that the average board of directors at S&P 500 companies is 66.4% independent, compared with 64.7% two years ago. But 55 companies in the S&P 500 did not have boards with a majority of independent directors.
Also, small companies are less likely to have boards with independent nominating committees and companies traded on the New York Stock Exchange are more than twice as likely as Nasdaq-listed companies to have independent nominating committees, the study found.
U.S. investment in international securities hit approximately $350 billion in 1995 and could reach $1 trillion by 2000, a survey commissioned by Citibank found. Fully 69% of respondents to the survey said they expect to lift their foreign equity holdings over the next two to three years.
The survey also found that portfolio managers are showing increased interest in the use of depository receipts. The survey found 51% of U.S. portfolio managers surveyed prefer to make foreign investments through depository receipts rather than by buying ordinary shares. Those who prefer DRs to ordinary shares represent 28% of assets managed by survey respondents.
Stock and stock fund investors expect a median 12% return by the U.S. equities market next year, according to a poll by Alliance Capital. That level of expectation slightly exceeds the historical returns of the S&P 500, which averaged returns of 11.88% per year over the past 40 years.
According to the poll, 67% of survey respondents put money aside in 1997; however, only 38% of respondents overall actually invested any new assets this year.
Skyline Asset Management opened a new no-load fund, the Skyline Small Cap Contrarian Fund. The portfolio manager is Daren Heitman, who will focus on finding small-cap companies trading at substantial discounts to their long-term potential. The fund is value-oriented.
P&I Daily will not be published Dec. 24-26 and Dec. 29-Jan2. Publication will resume Jan. 5. Happy holidays