PENSION FUNDS in Japan are opting to Buy Gold in the face of low yields from Japanese Government Bonds (JGBs).
The pension fund at Marubeni Corporation – which has a stock market capitalization of over $11 billion – plans to hold 7% of its portfolio as alternative investments, such as gold, real estate and hedge funds, while the Okayama prefecture Metal and Machinery Pension Fund plans to Buy Gold this year.
"We want to ensure we hit our assumed rate of return by diversifying our investments," commented a Marubeni official last month.
The yield on a 10-year JGB is currently less that 2%.
Last year Japan's ministry of finance launched an advertising campaign to promote JGBS. The campaign – which included the slogan "Women have a thing for men who own JGBs!!?.?.?.?right!?" – featured five women who claimed they would choose husbands who are "serious about money" and invest for "stability".
The Japanese pension funds are not the first to Buy Gold. The University of Texas Investment Management Co. took delivery of around $1 billion worth of Gold Bullion in April,
In Europe, meanwhile, a Dutch glass manufacturer's fund allocated 13% of its portfolio to gold, until it was told by its regulator in February to cut its holding.
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