Japan’s Government Pension Investment Fund’s allocation to domestic fixed income fell 14.04 percentage points during its 2014 fiscal year, according to data released by the fund Friday. The fund’s allocation to Japanese bonds stood at 39.39% as of March 31, down from 53.43% a year earlier and down from 64.89% in 2010.
The world’s largest pension fund has taken unprecedented steps to shift into higher risk assets. Over the past five years, its allocation to international stocks has more than doubled and its allocation to international equities has increased 1.9 times.
Hiromichi Mizuno, executive managing director and chief investment officer of the Tokyo-based pension fund, said at Pensions & Investments’ Global Future of Retirement conference fund executives are not in a rush to invest in private market investments, although the fund is building expertise. It has a 5% target allocation for alternatives, which Mr. Mizuno said is an “opportunity for us, not an obligation.”