Thailand’s pension scheme for government employees, the Government Pension Fund (GPF), plans to invest in Indian information technology (IT) companies and Chinese microchip producers, the fund’s secretary general has said. , Srikanya Yathip, to Bloomberg in a phone interview.
The government pension plan has approximately $33 billion in assets under management (AUM), and the majority of its foreign funds are currently invested in developed markets such as the United States and Europe. However, with the tumultuous nature of the pandemic, some pension staff think investing in emerging markets could be a good hedge.
“Developing markets such as China and India should offer prospects for better returns due to the resilience of their economies during the pandemic,” Srikanya told Bloomberg.
The Thai government previously only allowed 40% of pension assets to be invested in foreign stocks; however, a recent proposal would increase this number to 60%. The final word on the adoption of the proposal will take at least a few more months, according to Srikanya.
Currently, the pension has about 25% of its assets under management invested in foreign debt securities such as bonds. Another 13% is invested in global equities. The repo keeps the majority of its portfolio in fixed income, with Thai corporate bonds making up the largest portion of the asset allocation at 23.7%. The second-largest allocation is to Thai government bonds, which make up around 22.4% of the portfolio, according to the repo’s website.
Last year, the Thai government pension returned just 3.3%, down 30% from its 10-year average return of 4.77%.
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Tags: Bloomberg, bonds, China, emerging markets, Fixed Income, India, retirement, Thailand
