GPIF gain boosted by stock mar­ket rally

New Straits Times - - Business -

JA­PAN’S Gov­ern­ment Pen­sion In­vest­ment Fund (GPIF), the world’s largest pen­sion fund, posted a record quar­terly gain of US$92 bil­lion (RM409.4 bil­lion), thanks to a rally in the coun­try’s stock mar­ket.

GPIF yes­ter­day re­ported a re­turn of 7.98 per cent in its fis­cal third quar­ter, which ended in De­cem­ber.

Its pa­per gain to­talled 10.5 tril­lion yen (RM409.4 bil­lion). The fund man­aged 144.8 tril­lion yen worth of as­sets as of De­cem­ber.

“We had a big gain in the quar­ter but there are many com­plex is­sues in the world econ­omy so we would care­fully man­age the as­sets,” said GPIF spokesman Shinichiro Mori yes­ter­day.

Ja­pan’s bench­mark Nikkei share index ral­lied 16 per cent in the quar­ter on ex­pec­ta­tions of stronger global eco­nomic growth and as the yen weak­ened in the face of a surg­ing US dol­lar fol­low­ing the elec­tion of Pres­i­dent Don­ald Trump. It edged up an­other two per cent from Jan­uary to this month.

In 2014 GPIF made a his­toric pol­icy shift, in­creas­ing in­vest­ments in riskier as­sets such as stocks for higher re­turns, while it re­duced reliance on low-yield­ing do­mes­tic bonds.

Of all the pen­sion re­serve, which in­cluded 2.5 tril­lion yen pooled at Ja­pan’s health min­istry, 23.76 per cent was al­lo­cated to Ja­panese stocks.

GPIF’s do­mes­tic bond hold­ings ac­counted for 33.26 per cent of its as­sets, un­der­weight­ing its al­lo­ca­tion tar­get set in 2014 for the first time as yields in­creased.

The fund al­lo­cated 13.37 per cent of its as­sets to for­eign bonds and 23.16 per cent to for­eign stocks. The re­main­ing 6.3 per cent was mainly cash GPIF holds.

Its Ja­panese stock hold­ings re­turned 15.18 per cent, while the do­mes­tic bond hold­ings had a neg­a­tive re­turn of 1.07 per cent.

GPIF di­rectly in­vests only in a por­tion of bonds, while it asks other fi­nan­cial in­sti­tu­tions to man­age most of the bonds and all the stocks.


The Gov­ern­ment Pen­sion In­vest­ment Fund made a pol­icy shift three years ago, in­creas­ing ex­po­sure to riskier as­sets such as stocks and re­duc­ing reliance on low-yield­ing lo­cal bonds.

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