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BIG CHANGES: World’s Largest Pension Fund Shifts Allocation

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Japan’s Government Pension Investment Fund (GPIF), the steward of 67 million retirement participants, is embarking on a dramatic shift toward equities. The pension giant is cutting its allocation to domestic bonds, specifically Japanese government bonds (JGBs). Domestic bonds will go from 60% to 35%, a major change in allocation, over an unspecified period of time. The GPIF has been a key buyer of JGBs, paying into a ballooning pool of public debt. For the first time ever, the GPIF could be 50% weighted to public equities. With the Bank of Japan surprisingly easing monetary policy and the GPIF allocating toward stocks, Japanese equities are sure to get a short-term boost.

The GPIF uses both active, passive and smart beta managers in equities. The strategy shift is drawing the attention of global fund managers.

View Institutional Investor Profile of GPIF

GPIF President Takahiro Mitani told reporters, “The change in our investment stance is to face changes in the economy as it exits deflation.”

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UNICEF and NBIM to Host Meetings on Children’s Human Rights

The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.

According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”

NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.

“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.

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SouthGobi’s CEO Arrested, CIC Struggles with Investment

The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

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