Thailand’s $30 Billion Pension Fund Curbs Risk in New Allocation

(Bloomberg) -- Thailand’s $30 billion Government Pension Fund is lowering exposure to riskier assets in a revised asset allocation for the medium to long term.

The plan involves bolstering exposure to defensive Thai stocks, including those offering higher dividends, as a cushion against any downturn or market volatility, the fund’s Head of Investment Strategy Arsa Indaravijaya said in an interview.

“The new allocation points to a de-risking mode,” he said in Bangkok. “Risky assets have been shaved off, reflecting a late cycle that we’re moving toward, and we’re allocating some more into private assets like infrastructure and high-grade credits.”

The new asset allocation chimes with concerns that the equity bull market is aging just as the U.S.-China trade war saps the global economy. The Federal Reserve on Wednesday lowered interest rates for the third time this year as it tries to engineer a soft landing for the U.S. economy.

Arsa declined to give exact details about the revised asset allocation.

He said a recession doesn’t appear likely “in the very near future,” while adding that the pension fund may be more active in hedging against some downside equity-market risk next year.

©2019 Bloomberg L.P.

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