Japan - Japan's $1.35trn public pension fund could split its asset management in two, creating separate pools of safe assets and those offering higher returns, a government panel has said.
In an interim report published this week, the panel said such a move could make the Government Pension Investment Fund (GPIF) more transparent to the public.
The GPIF is the world's biggest public pension scheme with 122.5trn yen in assets under management - greater in value than India's GDP.
It currently invests two thirds of its portfolio in government bonds and has come under criticism for using such a conservative strategy. The benchmark 10-year Japanese government bond yield is about 1.165%, the lowest among G7 countries.
The review also comes after the GPIF suffered a 9.7trn yen loss in the fiscal year to March 2009, despite its relatively conservative investment stance.
The panel is now considering whether the fund should be divided into safe assets such as government bonds and another pool of assets for riskier investments.
The panel also called for the need to improve the governance of the GPIF, whose chairman is solely responsible for investment decisions.
The panel aims to issue a final report of recommendations by the end of the year.
Industry sources have mixed views on the idea of splitting the GPIF's assets.
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Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point