Japan's state pension fund, the world's largest, is in the process of selecting active Japanese stock funds using quantitative and scientific methods, President Masataka Miyazono said at Bloomberg's Buyside Forum event.
The Government Pension Investment Fund will not only consider managers that have applied in advance for possible selection, but also from a "wide range of funds, including those we approach," Miyazono said on Oct. 18.
With assets totaling approximately ¥219 trillion ($1.46 trillion) as of the end of June, GPIF's moves are closely followed by investors around the world.
It has been selecting active funds for North American and developed country stocks excluding Japan since the fall of 2022. Only 6.9% of domestic equities that GPIF own are managed by active funds.
The medium-term targets set for GPIF by the government stipulate that, in principle, it will use both passive and active funds to manage assets. But the selection criteria for active funds can be strict, requiring "enough" evidence to ensure excess earnings can be expected.
GPIF will strengthen its use of data science to select fund managers regardless of their size, or whether they are newly or well-established, Miyazono said.