Japan's public pension fund, the world's largest, is sizing up alternative investments, Reuters reports.

"We may consider alternative investments based on whether our risk-return improves by expanding investments to various products, and not because we need such investments when we raise our performance target," Takahiro Kawase, president of the Government Pension Investment Fund, told the Reuters Japan Investment Summit.

"Our asset size is so big that we need to take into consideration how big a market size is, whether our investment is realistic, risk factors, and whether it will lead to a meaningful investment diversification," he said. The fund has around 150 trillion yen ($1.4 trillion) in total assets. It currently does not invest in alternative products.

Kawase said, however, that GPIF needs to take into account various elements, such as the market's risk-and-return scenario, before deciding to add the asset class to its portfolio. He said while GPIF needs to start studying the asset class, the commodities market could be too small for it.

At the end of the current fiscal year, which is next March, the fund is expected to manage its assets under a model portfolio, where 67% will be invested in domestic bonds, 11% in domestic stocks, 9% in foreign stocks and 8% in foreign bonds.