President Donald Trump has ordered the main federal government pension fund not to invest its portfolio in Chinese companies, which his administration says pose a serious national security risk to the US, reported the Financial Times.
The intervention comes as the Federal Retirement Thrift Investment Board, an agency that manages almost $600 billion in its “Thrift Savings Plan,” prepares to shift the international component of the fund into an index that includes Chinese companies.
Robert O’Brien, US national security adviser, and Larry Kudlow, the White House economic adviser, said using the MSCI All Country World ex-US Investable Market index would “expose the retirement funds to significant and unnecessary risk” because they would be investing in Chinese companies that pose both national security and humanitarian concerns by operating in violation of US sanctions.
The FRTIB in November rejected a request from a bipartisan group of senators not to invest in the index, saying that such a move would disadvantage the roughly 5.5 million federal employees who invest in the retirement fund.
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