Japan’s Government Pension Investment Fund Posts Highest Gain in Two Years

World’s largest pension fund returns  $70 billion, driven by domestic and international equity exposure.

Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, posted its best gain in two years Friday, according to Bloomberg. The fund gained $70 billion, or 5.9%, for the year, with gains in its equity portfolio offsetting some losses in bonds.

The pension announced record assets of 144.9 trillion yen ($1.27 trillion) for the year ended March 31. The gains are the biggest since the fiscal year ended March 31, 2015, according to Bloomberg.

As they have for pensions elsewhere, equities drove the fund’s gains for the year. Domestic equities returned 15% for gains of 4.6 trillion yen. Foreign stocks returned 14%, for gains of $4.3 trillion yen. More than 80% of GPIF’s stock investments are in index-based strategies, Bloomberg reported.

The fund’s domestic bonds fell 0.9%, while foreign bonds fell 3.2%.

Japanese and overseas stocks each account for 23% of GPIF’s holdings. Domestic bonds account for 32%, while foreign bonds make up 13%. Cash holdings increased to 8.9% from 5.1% the prior year, and alternative assets accounted for just .07%–well below the fund’s 5% allowable limit.

“We need to remain humble in terms of performance numbers,” GPIF President Norihiro Takahashi said, according to Bloomberg. “Our mission is to gain stable returns while maintaining as forward-looking a view as possible on the market.”


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