The Government Pension Fund (GPF) plans to increase its investment weight in corporate bonds of the Group of Seven countries (G-7) by Bt15 billion to cash in on the higher rate of return from the general economic recovery.
Sopawadee said that the fund's investment in financial instruments issued by the G-7 countries would increase to about 5 per cent of the portfolio over the next six months. Currently, the agency is invested only in US short-term government bonds.
"We have started expanding into G-7-issued bonds this month," she said.
Besides the US, the other countries in the G-7 are England, France, Germany, Italy, Japan and Russia.
"There are now economic problems in the US and the EU, resulting in higher rates of return since early this year. Average global bond yields have been at 5.6 per cent, higher than the 3.8 per cent return rate on domestic bonds."
Sopawadee said the GPF would slightly reduce its weight in domestic bonds, now representing 67.6 per cent of the total portfolio.
She also said that the agency would seek approval from its board to invest 1.5 per cent of the portfolio in funds for domestic infrastructure funds.
Managers of several foreign funds have proposed that the GPF invest in several infrastructure proj?ects such as water systems, ports, expressways and airports. However, the agency has not made any decision as yet.All of GPF's investments from early this year up to August 6 have outperformed the market. The best performer was the portion of the portfolio invested in equities, amounting to Bt37.37 billion, giving a return rate of 17.9 per cent. The portfolio of Thai bonds, accounting for Bt244.64 billion, had a yield of 3.8 per cent. The global equities portfolio with an outstanding investment of Bt37.32 billion showed a negative return rate of 2.2 per cent, following the bearish world stock markets.
Sopawadee said the GPF would submit its risk management plan for foreign exchanges to the board this month. It would also add other currencies, such as the euro, the yen, the pound and the Hong Kong dollar in addition to the US dollar.