The value of Asia Pacific pension funds rose by 20 percent in 2017, according to the latest global 300 research from Willis Towers Watson’s Thinking Ahead Institute. What does that mean?

Within the Global 300, the assets under management (AuM) of all Asia Pacific pension funds (49) increased by 20 percent to almost $5 trillion in 2017, outpacing the Global 300 funds’ overall increase of 15.1 percent.

Among the 49 Asia Pacific pension funds, including corporate pension plans in the Global 300, sovereign and public sector pension funds with a total of 32 funds had combined assets of $4.4 trillion in 2017 and accounted for 24.5 percent of the total assets. There are 14 domiciled in the Asian (ex Japan) region, 10 in Japan, 7 in Australia and 1 in New Zealand, according to Willis Towers Watson's Thinking Ahead Institute.

Uncertainties Over Geo-Political Events

«Strong performance gains especially in this region during 2017 helped boost many Asian pension funds. However, uncertainties over geo-political and economic events that led to increasing market volatility in 2018 are seen as headwinds to Asia and some emerging markets,» Jayne Bok, head of investments for Asia at Willis Towers Watson, said.

Among the top 20 funds in the research, India’s Employees' Provident entered into the top 20 during 2017, moving up to the 19th spot (from 21st). Korea’s National Pension (3rd), Japan’s Local Government Officials (12th) and Malaysia’s Employees Provident Fund (14th) climbed up one place from their previous year’s ranking position.

Some Progress in Terms of Governance

Both China’s National Social Security Fund (6th) and Singapore’s Central Provident Fund (9th) retained its previous position in the ranking. Japan’s Government Pension remained at the top of the ranking, where it has been since 2002.

«The increased number of the largest funds originating from the Asian region is reflective of a longer-term trend. Some progress has been made in terms of governance structures and resiliency but there is much more that needs to be done. These countries are especially interesting to monitor as they are typically in the earlier stages of maturity and can continue to adapt and develop their investment models,» Jayne Bok added.