Nagasakiya fund alters mix, increases equities
TOKYO -- The Nagasakiya Pension Fund will change its asset allocation policy effective April 1.
The new asset mix will be 35% Japanese equities, 25% foreign equities, 30% Japanese bonds and 10% foreign bonds, said Tatuo Narushima, the fund's executive director. The fund now has 50% of its assets in Japanese bonds, 30% in Japanese equities, about 13% in foreign equities and 7% in foreign bonds.
The fund will continue to use its existing money managers, which manage balanced portfolios. Previously, the fund's managers followed the soon-to-be-repealed 5-3-3-2 rules, which required funds to invest at least 50% of their assets in bonds and forbid them to invest more than 30% could be in Japanese stocks, 30% in foreign securities and 20% in real estate.
Under the new arrangement, the managers of the 37 billion yen ($299 million) fund will still manage balanced portfolios, but their allocations might change to accommodate the new targets, he said.
Japan's PFA eyes adding strategies
TOKYO -- The Pension Fund Association, with 3.5 trillion yen ($28 billion) in assets, is considering investing in additional asset classes and strategies. Under consideration are: derivatives, which could be fixed-income or equity based, foreign or domestic; tactical asset allocation; and actively managed emerging markets equities.
Decisions about such investments, including the size of any allocations, are still a way off, said Noboru Terada, executive director-pension investments. The fund still has to do extensive research into the new areas, so any movement into them would be at least a year away, Mr. Terada said.
InterSec foreign equity median returns 6.7%
NEW YORK -- The median manager of InterSec Research's non-U.S. equity universe had a return of 6.7% in U.S. dollar terms vs. the Morgan Stanley Capital International Europe Australasia Far East Index return of 1.9% for 1997. In local currency terms, EAFE was up 13.8%.
Measured in U.S. dollars, Europe was up 24.1%. In contrast, Japan was down 23.6%; the Pacific Basin, excluding Japan, was down
30.8%; the emerging markets, excluding Malaysia, dropped 2.4%.
The median manager of European equities in the InterSec universe returned 21.8%; managers of Japanese and Pacific Basin ex-Japan equities were down 14.2% and 28.8%, respectively. The median manager of emerging markets ex-Malaysia returned 8.6%.
Developed market indexes post gains in January
NEW YORK -- The Morgan Stanley Capital International World index climbed 2.7% in dollar terms in January, while the MSCI EAFE index advanced 4.4%. The MSCI Emerging Markets Free index fell 7.9% in dollar terms.
Last month, the top performing developed markets were Portugal, up 10.2%; Italy, 9%; and Japan, 8.9%. At the bottom was Singapore's market, with an 18% drop.
Among emerging markets, Korea's market rebounded with a 70.6% leap, followed by the Thailand free index, up 34.2%. At the bottom was Indonesia's market, which posted a 35.5% drop.
Canadian funds lag 1996 performance
TORONTO -- The median Canadian pension fund earned a return of 14.8% for 1997, four percentage points below the previous year's return.
SEI's Canadian Pension Fund Performance Survey also reports Canadian active equity managers had a median return of 19.3% last year, 9.6 percentage points below 1996's return, and Canadian active bond managers had a median return of 9.7%, compared with 11.8%.
Active foreign equity managers of Canadian funds fared better, returning 21.3% vs. 17.1%. U.S. equity managers also did well, returning 35.7% vs. 1996's 21.8%. But non-North American active manager's return was 11.1% last year, compared with 13.5% in 1996.