GPIF Needs Wage-Based Return Goal, Less Bond Focus: Panel
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The world’s largest pension fund should look to beat wage growth when setting investment goals and no longer needs to focus on domestic bonds given quickening inflation, a Japanese government advisory panel said.
The 128.6 trillion yen ($1.26 trillion) Government Pension Investment Fund should seek yearly returns of 1.7 percent plus the rate of pay increases for workers, according to a draft report from the committee formed to help the health ministry decide on economic assumptions for investment targets. Using the group’s preferred scenario, that implies a 4.2 percent return goal. While maintaining a call for safe and efficient investment, the committee signaled it may be time for GPIF to shift away from Japanese sovereign debt.