Japan’s top mutual fund adds Poland, Mexico to bond portfolio

TOKYO, Oct 15: Japan’s Kokusai Asset Management, the manager of the country’s biggest mutual fund, said it has added Mexico and Poland to its $19 billion flagship bond fund in a bid to diversify its allocations and boost investment returns.
The move follows Kokusai’s inclusion of New Zealand to its bond portfolio in February after it slashed allocations to the euro zone last year due to Europe’s debt crisis. Kokusai has also been increasing its bond weighting for countries such as Canada and Australia.
‘We have newly included Poland and Mexico in our portfolio for the purpose of improving the fund’s profitability,’ Kokusai said in a statement.
Kokusai’s Global Sovereign Open, its 1.48 trillion yen ($18.9 billion) flagship bond fund, held 1.6 percent in Mexican bonds and 1.9 percent in Polish bonds as of Oct. 11, data from the asset manager showed.
The Global Sovereign fund, which was launched in December 1997, is an actively managed bond fund that invests in global government and agency bonds of developed countries with high credit ratings.
The Global Sovereign fund’s exposure to U.S. Treasury bonds dropped 5.2 percentage points to 27.7 percent as of Oct. 11 from a week earlier following the fund’s addition of Mexico and Poland.
The fund has sharply cut its exposure to the euro zone. Its weighting for the euro zone was 8.3 percent as of Oct. 11, down from a peak of 43 percent in late 2009.
It holds debt from only four euro zone countries in its portfolio: 4.4 percent in German bonds, 2.2 percent in French bonds, 1.4 percent in Dutch bonds and 0.3 percent in Finnish bonds, the data showed.
($1 = 78.3550 Japanese yen)


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