India's third largest pension fund plans to allocate most of its new funds to bonds in the next fiscal year

Golden Ten Data reported on March 17 that UTI, India’s third-largest pension fund, has begun reinvesting in bonds after a year of heavy stock purchases. The pension fund manages approximately 4.13 trillion rupees (equivalent to $45 billions) in assets. Its CEO, Umesh Gupta, stated in an interview that in the next fiscal year starting in April, about 40%-50% of new investments will be allocated to government bonds. Driven by regulatory adjustments, this move reverses last year’s stock-heavy investment strategy and may help support India’s bond market. Although the Reserve Bank of India has cut interest rates, bond yields remain high due to massive government borrowing and weak demand depressing prices. Gupta said that about 20%-25% of UTI Pension Fund’s new investments in the next fiscal year will be allocated to stocks, with the remainder going to corporate bonds. Institutional statistics show that in the current fiscal year, about three-quarters of the fund’s investments were allocated to stocks, and about one-quarter to corporate bonds.