Trust Banks To Go Heavy On Domestic Bonds In FY12 Pension Investing

Shifting to a defensive posture, three of the biggest trust banks will raise the domestic-bond weightings of their standard portfolio for corporate pension funds next fiscal year, according to the Nikkei. Their average Japanese bond allocation will rise to 38.5%, the highest level in a decade and more than 10 percentage points higher than the near-term low in fiscal 2007. Most of this category consists of government bonds. At the same time, trust banks will trim pension funds' exposure to equities to shield investors from the European debt crisis and other risks. The figures are for balanced portfolios managed by Sumitomo Trust, Mitsubishi UFJ Trust, Mizuho Trust and Resona Bank. The standard portfolios consist of foreign and domestic stocks and bonds. Expected returns are around 4%.