SSO sets long-term investment strategy

SSO sets long-term investment strategy
News from Bangkok Post:

The Social Security Office (SSO) has set a long-term return target of 5.5% to 6% per year, with projected returns of 40 billion baht this year.

Win Phromphaet, the SSO’s head of global and real estate investments, said the agency will also increase its investments abroad including in foreign equities, real estate and commodities.

The SSO, which manages retirement assets for more than 9 million workers nationwide, will focus its global investments in the form of 60% debt instruments, 20% equities and 20% real estate and other alternative assets.

It has appointed Thanachart Asset Management to establish a private fund to manage its global equity and property investments.

Mr Win said the SSO will increase its global asset exposure by US$ 200 million this year, with a focus on high-yield emerging market assets.

Key markets include Poland, South Korea, Mexico, Malaysia and Australia, where 10-year bond yields offer favourable returns of 3-5% per year, he said.

Mr Win said the SSO is also looking to invest in Indonesian debt.

While that country remains ranked below investment grade, upgrades are possible due to its strong economic potential.

Asean bond funds are another attractive option, given the increase in economic potential for many countries in the region with the creation of the Asean Economi…………… continues on Bangkok Post

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Amundi considers its views on Italy and Spain in latest strategy outlook
News from Investment Europe:

Italy and Spain dominate the issues considered in Amundi’s latest Cross Asset Investment Strategy note.

Italy and Spain: a tale of two situations and two trajectories. Lack of discrimination and high correlations are a hallmark of financial crises: countries or sectors with different fundamentals are painted with the same brush. Once financial stress is on the wane, it becomes possible to assess “relative value”. On this point, the difference between Spain and Italy is one of the most striking: growth model, public debt trend, household debt, non-performing loans, real estate, credibility, solvency, political stability, competitiveness. None of this is really in Spain’s favour.

What do the fundamentals tell us about the “fair” hierarchy of bond yields in the eurozone? In order to evaluate the relative health of eurozone countries, we have established a ranking that takes current economic fundamentals and their dynamics into account. This has provided a great deal of information about likely future trends in interest rates.

Eurozone country allocation: a closer look at equity market valuations. We discuss the intra-eurozone valuation hierarchy, highlighting a revaluation potential in Spain and Italy which can only be exploited once earnings normalise. In…………… continues on Investment Europe

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