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The World's Biggest Pension Fund Is Switching to Stocks

  • Credit Agricole sees GPIF selling bonds on negative yields
  • Bank of America predicts stock buying to achieve 25% weighting
Stock indexes are displayed on an electronic stock board outside a securities firm in Tokyo, Japan, on Wednesday, Jan. 20, 2016. Japanese stocks plunged into a bear market amid a slump in equities across Asia as investor concerns over the global economic outlook outweighed technical signs that a China-fueled rout has gone too far.
Photographer: Kiyoshi Ota/Bloomberg
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The world’s biggest pension fund has two good reasons to extend its switch from bonds into stocks: sovereign debt with negative yields and a plunge in equities that cut valuations to a three-year low.

Credit Agricole SA says the Bank of Japan’s decision last month to adopt rates below zero on some reserves will force the $1.2 trillion Government Pension Investment Fund to lower its domestic bond holdings to as little as 25 percent of its portfolio, 10 percentage points lower than its current target. GPIF would have to buy 6.2 trillion yen ($54 billion) of domestic stocks just to achieve its allocation target of 25 percent, according to Bank of America Corp.