High hedging costs and a low yen have led Japanese life insurers to focus on domestic government bonds, although declining yields might also prompt them to seek out alternatives.
Active managers need to up their game but remain vital in some markets, delegates heard from Japan Post Bank and others at AsianInvestor’s Institutional Investment Forum in Tokyo.
The current indiscriminate hunt for yield could land some firms in hot water, as it has in the past, says Ian Brimecome, a senior executive at Tokio Marine.
Japanese investors need to carefully sift through a bumper crop of funds raising capital. Smaller gems may outperform.
Selling life insurance products is the third new service that the Japan Post Group has been allowed to undertake since its privatisation started in October last year.
Japan's newest - and biggest - distributor of investment products will gradually adopt new types of funds, including alternatives.