The Government Pension Fund plans to expand its investment abroad, particularly in Asia and the US.
The GPF will also ban its fund managers from directly investing in the financial market as one of its new measures aimed at improving corporate governance, newly appointed secretary-general Sopawadee Lertmanuschai said yesterday.
"Our priority is to improve corporate governance, in order to win trust from our members," she told a press conference.
Last year, GPF members who had suffered investment losses in 2008 complained about the investment ethics of the managers of this largest of local pension funds, leading to a change in its secretary-general.
Sopawadee said other fund managers and she would be proscribed from investing in the market directly. It can only be done via mutual funds.
"Details of the new restrictions will be made public later, but they've already begun to be implemented," she said.
Other GPF staff may buy stocks directly in the stock market but must report such activities each quarter.
Members will also soon be offered a choice between high-risk high returns or safe investments, Sopawadee said.
She suggested the GPF's 1.6 million members take a long-term focus, saying average returns were about 7 per cent over the past 12 years, better than bank-deposit rates.
Sopawadee promised to provide more benefits for members before they retired, such as special mortgages or education loans. The GPF will also take into account the good-governance factor of those firms in which it invests.
She said the GPF would look for more opportunities abroad this year, particularly in real estate, private equity and infrastructure.
"We have room to expand our international portfolios, because we now invest 10 per cent in foreign stocks and 4 per cent in foreign bonds, while the ceiling on those is 25 per cent," Sopawadee said.
She said Asia would continue to enjoy high economic growth, particularly China and India, while political uncertainty in Thailand also enhanced the attractiveness of foreign investment.
Deputy secretary-general Nachcha Protpakorn said the US looked more promising than Europe. Plus, the GPF has also requested permission from the Finance Ministry to invest in commodities like gold and oil.
She said interest rates might increase in the second half, so the GPF would hold shorter-maturity bonds, averaging about two-and-a-half-years.
GPF executives insist the fund will focus on safe investments in accordance with the law, allocating no less than 60 per cent of its portfolio to highly secured assets like government bonds.
As of this past Monday, net assets were worth Bt336 billion.
Sopawadee said she intended for returns to beat the inflation rate and come in equal to or better than the market benchmark.
Last year, investment returns were especially good at 8.9 per cent, due to an almost 70-per-cent jump in the stock index. However, returns may not be as high this year, she conceded.
At present, the GPF invests 69 per cent of its resources in local bonds and 9 per cent in the local bourse.
