Huge gains from its domestic and foreign equities portfolios drove Japan’s Government Pension Investment Fund’s 16.5% return in fiscal 2025, boosting the asset value of the world’s largest pension fund to 293.64 trillion Japanese yen ($1.85 trillion).
Although the performance is a sharp turnaround from its meager 0.7% gain in fiscal 2024, the returns still fell short of the GPIF benchmark’s 16.64% return.
Japanese equities were the top-performing asset class, posting a massive 34.62% return, followed by foreign equities, which gained 27.16%. Foreign bonds also fared well with a 12.33% return, while the domestic bond portfolio partially offset the gains with a 5.11% decline attributed to the depreciation of the yen.
Despite leading the portfolio’s gains, the pension giant’s domestic and foreign equities portfolios both missed their benchmarks, by 3 and 60 basis points, respectively. Meanwhile, their domestic and foreign bonds topped their respective benchmarks’ performance by 26 basis points and 17 basis points.
As of the end of March, the GPIF’s asset allocation was 26.91% domestic bonds, 24.80% foreign equities, 24.48% foreign bonds and 23.81% domestic equities.
“The world’s economies and financial markets have dramatically changed in recent years, and the environment surrounding asset management has become increasingly unclear,” GPIF Board of Governors Chair Yuri Okina said in a statement. “In the face of these circumstances, GPIF will prioritize a long-term perspective as it strives for stable investment and engages in organizational management with a high level of transparency to foster trust with the Japanese public.”
The GPIF disclosed its top domestic and foreign stock holdings. The portfolio’s top three Japanese equity positions in fiscal 2025 were Toyota Motor, Mitsubishi UFJ Financial and Hitachi. The top three stock holdings were Nvidia, Apple and Microsoft.
Tags: Asset Allocation, Government Pension Investment Fund. GPIF, investment performance