Global Public Pension Funds 2004-2014: How Public Pension Funds Change Strategies with Their Investment Portfolio

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Date

2016-05

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The Ohio State University

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Abstract

Applying public pension funds in eight countries—Canada (CPP), Denmark (ATP), Japan (GPIF), Netherlands (ABP), Norway (GPFG), South Korea (NPS), Sweden (AP), and the United States (CalPERS), I investigate backgrounds, changes in investment strategies, and performance from 2004 to 2014. With comparison among portfolio over the time periods, I find that: (i) public pension funds shifted investments from fixed income to equities; (ii) there is increased investments in global markets transferred from domestic markets; (iii) investments in public markets moved to private markets through alternative investments. Another administrative change in those pension funds is increased in-house management of their investments, and this change is to reduce fees and to exert better control. I also compare investment performances among three sub-periods, pre-crisis (2004-2006), intra-crisis (2007-2010), and post-crisis (2011-2014). The data indicate that all of the eight countries have the lowest returns in intra-crisis; and six out of eight countries represent higher investment returns in pre-crisis compared to post-crisis.

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Monthly Research Scholar Award

Keywords

Public pension funds, Investment strategies, Asset allocation, The 2008 financial crisis

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