10 trillion yen scale “university fund”, TOPIX boost effect up to 6% –Bloomberg

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It is expected that TOPIX will be boosted by buying Japanese stocks with the start of management of a “university fund” that supports research with investment profits. It is aiming for an investment scale of 10 trillion yen by investing public funds, and is expected to play a supporting role when stock prices fall in place of the Bank of Japan, which is reducing exchange-traded fund (ETF) purchases.

Japan’s science and technology budget is only one-third that of the United States and one-fifth that of China, and the number of paper citations is also high.In the declineThe purpose of the university fund is to support research and human resource development that are comparable to the rest of the world with investment profits. It will start at 4.5 trillion yen by the end of 2021, aiming for an operational scale of 10 trillion yen at an early stage. The long-term investment target is 4.38% or more per year to cover the maximum amount of support provided to the university of 300 billion yen and the increase in prices. The asset composition is 65% for stocks and 35% for bonds.

Science and technology budgets of major governments

Source: National Institute of Science and Technology Policy “Science and Technology Index 2020”

In the investment policy, the Government Pension Investment Fund (GPIF), which aims to achieve the investment target with the minimum risk, will take a positive stance to “maximize the yield within the permissible risk”. Nomura Securities estimates that the domestic equity weight of the basic portfolio is 25.7% to 32.9% based on investment targets and permissible risks.Allocate quarters to domestic and foreign stocks and bondsIt is expected that the proportion of Japanese stocks will increase compared to GPIF.

According to Yunosuke Ikeda, an analyst at the same certificate, the immediate purchase of Japanese stocks is expected to be 1,160 billion yen to 1,480 billion yen. According to a trial calculation based on the market capitalization of the First Section of the Tokyo Stock Exchange as of September 30, TOPIX will be boosted by 4.6% to 5.9%.

Hiroshi Namioka, chief strategist of T & D Asset Management, said, “The scale is small compared to GPIF, but now that the Bank of Japan has stopped buying Japanese stocks much, it will be a material to improve supply and demand, and it is expected that it will support it in the downturn. “.Professor Takatoshi Ito of Columbia University in the United States, who summarized the operational policy, said in May.In an interview, he argued that the lesson of the past financial crisis should be to share the perception that “when it crashes, it’s a place to buy.”

Meanwhile, Managing Director Hiroshi Matsumoto of Picte Investment Management pointed out, “I don’t think the stock price will rise due to supply and demand. Fundamentals will determine the stock price level.” However, he said, “It is not a bad story to see long-term funds flowing into Japanese stocks, which is also supportive for overseas investors.”

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