Japan’s $1.54 trillion Government Pension Investment Fund (GPIF), the world’s largest pension fund, reported a robust 4.6% return for its fiscal 2019 third quarter that ended Dec. 31 to earn a profit of 7.36 trillion yen ($67.4 billion) and raise its total asset value to 168.99 trillion yen.
The performance was a sharp turnaround from the third quarter of fiscal 2018, when the fund lost 9.06%, or 14.8 trillion yen, and out-clipped the first and second quarters of the fiscal year when it returned 0.16% and 1.14%, respectively.
Equities were the top-performing asset class for the fund during the quarter, and for the fiscal year-to-date period, as foreign equities returned 9.73% for the third quarter, just under the benchmark’s return of 9.76%, and 11.27% for the first three quarters combined, which was just above the benchmark’s return of 11.24%. Domestic equities returned 8.58% for the quarter, just missing the benchmark’s 8.59% return, and 9.62% for the fiscal year to date, compared with 9.63% cumulatively for the first three quarters.
Foreign bond investments earned 0.86% for the fund’s portfolio during the quarter, topping the benchmark return of 0.52%, and 3.04% through the first three quarters, which exceeded the benchmark’s return of 2.58%. Domestic bonds lost 0.96% during the quarter, but beat the benchmark, which lost 1.01%, and were up 0.15% for the fiscal year to date, compared to the benchmark’s gain of 0.06%. The overall portfolio is up 5.91% for the first three quarters of fiscal year 2019.
The GPIF also reported that the rate of investment return from fiscal year 2001 to the third quarter of 2019 is 3.23% annualized for cumulative returns of 75.24 trillion yen. The fund did not provide a breakdown of its current asset allocation; however, its most recent annual report shows that it had 26.3% in domestic bonds, 25.53% in foreign equities, 23.55% in domestic equities, 16.95% in foreign bonds, and 7.67% in short-term assets.