NETHERLANDS - Dutch pension giant ABP has decided to increase its asset allocation in indexation bonds from 4.2% to 7% by 2009.
Roderick Munsters, director of ABP Asset Management, reportedly said the fund was not planning to buy the existing French government inflation-linked bonds or the index linkers in the UK, as the returns available were too low.
Commenting on the decision, Thijs Steger, a spokesman for ABP, said: “It is correct that ABP wishes to grow its allocation of indexation bonds from 4.2% to 7% through its financial engineering capabilities, but not purely through our financial engineering capabilities.”
Indexation bonds function by paying a coupon that varies according to some underlying index, which is usually the Consumer Price Index.
ABP’s asset allocation decision follows its recent announcement, in conjunction with PGGM, to award a €500m mandate to their joint investment vehicle AlpInvest Partners, to invest in clean technology.
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