South Korean pension fund shuns U.S. debt

[Joanne98]

By Song Jung-a, Andrew Wood, and Michael MacKenzie
Financial Times, London
Wednesday, March 26, 2008

http://www.ft.com/cms/s/0/6dcf5f86-fb67-11dc-8c3e-000077b07658.html

The world's fifth-largest pension fund will no longer buy US Treasuries because yields are too low. The move signals what could be a big shift by financial institutions away from US government debt into higher-yielding assets.

South Korea's National Pension Service, which has $220 billion in assets, said on Wednesday it wanted to broaden its range of overseas investments.

"It is difficult to buy more US Treasuries because the portion of our Treasury investment is already too big and Treasury yields have fallen a lot," said Kwag Dae-hwan, head of global investments at the NPS. "We need to diversify our portfolio away from US Treasuries and we find asset-backed securities and corporate debt more attractive because of wider credit spreads."

http://www.gata.org/node/6177