Large Canadian pension plans anticipate increasing their international equity exposure and focusing more on reviewing their currency management systems in the next few years, according to a survey from JPMorgan Asset Management.
More than 80% of pension plan respondents believed the average non-domestic allocation would be more than 30% within three years, and 28% believe the international allocation will rise to more than 40% in five years, according to the survey. Of those predicting changes to their asset allocations, 82% plan to allocate funds to non-domestic alternatives, according to the survey.
The average current international allocation is 29%, close to the foreign investment limit of 30% that was repealed last year.
Also, one-third of respondents said they plan to focus on active currency management if their allocations to non-domestic assets increase.
The survey was conducted in the third quarter 2005 by Harris Interactive for JPMorgan. It examined the investment strategies and practices of 104 of the largest Canadian defined benefit pension plans, with assets totaling roughly C$240 billion (US$206 billion), confirmed JPMorgan spokeswoman Jacqueline Meere.
