Pension Fund Investment from Ageing to Emerging Markets

The rapid ageing of populations in the rich economies can be expected to stimulate strong growth in private funded pensions, providing a massive potential of foreign finance for developing countries. Pension managers can reap big diversification benefits by investing on the emerging stock markets of the younger economies, benefits which are largely unexploited so far. The authorities in OECD countries should consider removing regulatory constraints imposed on pension assets that deprive retirees from the pension-improving benefits of global diversification. Policy makers in developing countries should design policies that reassure institutional investors on default risk and stock market illiquidity, if they want to tap a higher share of OECD pension assets