Alternative investment analysis and advocacy organization, Alternative Asset Analysis (AAA), has spoken out in support of the decision by Japanâ€™s pension funds to increase their exposure to alternative assets.
Online PR News – 28-April-2011 – – Boston, Massachusetts, April 28, 2011 -- Alternative investment analysis and advocacy organization, Alternative Asset Analysis (AAA), has spoken out in support of the decision by Japanâ€™s pension funds to increase their exposure to alternative assets.
A new survey by JP Morgan Chase & Co, found that some 32 per cent of the nationâ€™s 119 pension funds are planning to increase their investment in alternative funds, such as private equity, precious metals, forestry and real estate in the year ending March 2012.
The change in approach is the result of a desire to diversify portfolios and increase returns on investment. AAA claims that this is a wise strategy as returns on investment in alternative assets such as forestry â€“ particularly in emerging markets like Brazil through plantation managers such as Greenwood Management and Robinia Invest â€“ have far exceeded returns from equities for several years now.
AAAâ€™s partner, fund manager and investment analyst Anthony Johnson, stated, "Itâ€™s not surprising that Japanâ€™s pension funds are opting for a more diversified approach as the global economy is still showing signs of the kind of volatility that can put pressure on stocks and shares. This is making equities a much less attractive prospect than during a healthier economic climate."
Hidenori Suzuki, the JPMorgan Asset Managementâ€™s Head of Investment Advisory in Japan, said, "We're expecting further diversification to continue going forward among pension funds. The trend to lower domestic bond holdings is rather new."
Typically, Japanâ€™s pension funds were heavily invested in bonds and the government bond yield has been around 1.2 per cent. Now, about 14 per cent of the respondents to the JP Morgan Chase & Co survey said they would reduce their investment in domestic bonds and 21 per cent added that they will also shrink their investment in local equities.
"The recent earthquake and tsunami has obviously had an impact on how Japanese investors view their portfolios," explained Anthony Johnson. "However, around 89 per cent of those asked said that it would not have a major effect on their strategy when it comes to investments. One in ten did still claim that they were concerned that the recent events may mean their investments may not be carried out as planned or that they may change their strategy in the future," concluded Johnson.
The survey carried out by JP Morgan Chase & Co questioned a total of 119 pension funds with combined assets of $122 billion.
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