Pen­sion fund bounces back from losses

The Myanmar Times - - Business -

JA­PAN’S pub­lic pen­sion fund, the world’s big­gest, has swung back from huge losses, pro­vid­ing some respite af­ter com­ing un­der fire for mov­ing a chunk of its bond-heavy port­fo­lio into riskier eq­ui­ties.

The Gov­ern­ment Pen­sion In­vest­ment Fund said it had a re­turn of 1.84 per­cent, or 2.37 tril­lion yen (US$21 bil­lion) in the three months through Septem­ber, boost­ing its to­tal as­sets to 132.1 tril­lion yen.

Gains in Ja­panese and for­eign stocks helped off­set a loss on its bond hold­ings, the fund said.

The fig­ure comes af­ter two straight quar­ters of losses to­talling about 10 tril­lion yen.

In 2014, the fund said it would dou­ble the amount of eq­ui­ties it holds to gen­er­ate higher re­turns.

“It’ll take some pres­sure off,” said Naoki Fu­ji­wara, chief fund man­ager at Shinkin As­set Man­age­ment, in Tokyo.

“This quar­ter will prob­a­bly be good too. But be­fore we all get too ex­cited, we need to be wary about whether this can con­tinue for long,” he told Bloomberg News.

The con­ser­va­tive fund was crit­i­cised for its de­ci­sion to push into stocks. It then posted in Ju­lySeptem­ber last year its worst quar­terly fall since 2008, hit by a global eq­uity sell-off fu­elled by fears over China’s econ­omy.

The strat­egy shift an­nounced in 2014 was aimed at deal­ing with Ja­pan’s soar­ing num­ber of re­tirees who de­pend on the mam­moth pen­sion.

Un­like some over­seas coun­ter­parts, Ja­pan’s pen­sion fund has long kept the ma­jor­ity of its cash in su­per­safe and su­per-low re­turn Ja­panese gov­ern­ment bonds. –

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