South Korea National Pension fund to cut back on treasuries

UBS is suggesting in their daily economic briefing that South Korea's National Pension Fund intends to reduce is holdings of US Treasuries (USD3.6bn as of end 2009), according to an article in the local press. The aim is diversification, though it is not clear if that includes diversification out of the dollar, or just out of government paper.

This is a very small deal but could be the first of many people starting to sour on treasuries. Unfunded liabilities and actual debt leave the investment in a very difficult position.  I would say impossible to manage without cuts in spending which is very unlikely.

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