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Will gold bullion benefit as world's largest public pension fund weighs "alternative assets"? - Wealth Managers

February 04,2013


Japanese fund fears erosion of portfolio value as central bank launches unprecedented money printing

Will gold bullion benefit as world's largest public pension fund weighs

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"Japan's new ultra-loose monetary policy is likely to impact investor behavior in a number of ways as expectations of yen weakness become entrenched," writes Craig Stephen at MarketWatch. "Japanese investors will become more aggressive searching for yield and diversifying into non-yen assets to protect against currency debasement."

This appears to be playing out now -- in a major way. The following Bloomberg story reveals that a major pension fund is considering selling bonds and investing in "alternative assets," which by definition include gold.

Japan's public pension fund, the world's biggest manager of retirement savings, is considering the first change to its asset balance as a new government's policies could erode the value of $747 billion in local bonds.

Managers of the Government Pension Investment Fund, which oversees about 108 trillion yen ($1.16 trillion) in assets, will begin talks in April about reducing its 67 percent target allocation to domestic bonds, President Takahiro Mitani said in a Feb. 1 interview in Tokyo. The fund may increase holdings in emerging market stocks and start buying alternative assets.

Zero Hedge weighed in with this comment: "As for 'alternative assets,' if this includes gold, prepare for liftoff as all other retirement fund managers across the world, who have a blended allocation to gold somewhere between 0% and 0.5%, piggyback on Japan's example."



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