Tuesday, September 19, 2017

Fukoku Mutual Life to invest US$5bn in riskier assets

Japanese insurer Fukoku Mutual Life Insurance has announced plans to invest up to ¥500 billion (US$4.69 billion) in higher-yielding assets over the next five years.

Takehiko Watabe, general manager of investment planning at the Japanese insurer, told Reuters that the insurer will create a new fund this fiscal year to invest in high-yielding, riskier products during the next five years.

Watabe also said that the insurer expects to enjoy returns from the favourable foreign exchange rate until at least 2020, thanks to a strategy to increase its unhedged investment in foreign bonds in 2010.

However, the Bank of Japan’s negative interest rate policy will likely eat into profits after these positions mature in 2020, which is why the company needs to respond with a new hunt for yield.

It will likely invest mainly in foreign corporate debt, according to Watabe, and foreign equities.

 

 

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