TOKYO: Japanese fund mangers still want to put more than half their assets under management into bonds, despite falling yields, expecting a prolonged period of low interest rates around the world, a Reuters survey showed on Friday.
But the survey of seven Japan-based fund managers, polled between Jan. 19 and 23, also found that some managers wanted to dabble in riskier "alternative assets" as returns from bonds dwindled.
The survey found respondents on average wanted to allocate 51.7 percent of their funds to bonds, below a 1 1/2-year high of 52.7 percent allocated in December, and above 50 percent for five months in a row.
"There is virtually no inflation concern so there will likely be expectations of further monetary easing and ultra-low interest rates will stay for longer than expected," said a fund manager at a Japanese asset management firm, who declined to be named because of company policy.
Fund managers favoured domestic bonds, weighting Japanese bonds at 46.4 percent compared to 31.3 percent in December.
"The BOJ will have to take additional easing steps by the end of year, so the domestic bond market will continue to be dominated by the BOJ's massive buying," said Yuichi Kodama, chief economist at Meiji Yasuda Life.
The weightings on equity stood at 41.4 percent, slightly below 42.9 percent in December as some fund managers took cautious view on European shares.
"Although a weaker euro is positive, European shares will be shackled by worsening economic sentiment in the region and Russia," said a fund manager at a European asset management firm.
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