Retirement-fund managers will probably take a more conservative investment strategy in the next decade because of Asia's financial crisis and introduction of the Mandatory Provident Fund (MPF), according to Paribas Investment (Asia).
'After the financial turmoil, employers and employees would not only require fund managers to achieve the highest return for their retirement funds,' head of investment Winnie Lee said yesterday.
'They would also consider the risk factors involved in their investment strategy.' Ms Lee said retirement-fund managers had needed an aggressive investment strategy in the past 10 years to beat salary inflation.
However, the financial crisis resulted in frozen or even reduced salaries for many employees.
'We expect the inflation level in the region would remain at low levels in the next 10 years,' she said.
'This will allow fund managers to take a balanced portfolio of risk and return, with no need to trace the maximum return only.' Paribas Asia senior vice-president Ada Mak said the introduction of the MPF next year would force retirement-fund managers to take conservative investment approaches.
