Dutch pension fund giant PGGM is reviewing the strategic make-up of its bond portfolio, with an outcome expected by year end.
Director of investment at the Zeist-based fund, Niels Kortleve, told International Pensions News: “We are currently looking into the added value of adding all kinds of asset classes to the fixed income area and we hope to finalise that research by the end of the summer. In the last quarter of this year we will decide if and how we will change our fixed income portfolio.”
The fund is considering adding international high yield bonds, emerging market debt, and international credit.
At present 30% of the funds EUR52.6bn assets is invested in fixed income.
According to PGGM’s annual report for 2000, one of the main decisions to emanate from last year’s asset liability study was the decision to switch from Euroland fixed income securities to a worldwide bond portfolio.
Currently, global bonds consists of exposure to North American fixed income securities and Japanese gilts. Kortleve said that the fund aims to expand global bonds to 30% of the bond portfolio. “We aim to give 20% to the North American market and 10% to the Japanese government bond market, managed internally”, he said.
However, Kortleve added: “Whenever we decide to pick up for instance American credits or Japanese credits then it is more likely to make use of external managers”.
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