Japan’s GPIF posts annual return of 8.64%

09 July 2014   Category: News, Asia, Global, Japan   By Maya Ando

Japan’s Government Pension Investment Fund (GPIF), the world’s largest public pension fund, generated a return of 8.64%, or 10.2 trillion yen (US$100 billion), on its investments for the fiscal year ending March 2014.

The result at the GPIF, which reported a fund size of 126.5 trillion yen, failed to match the return of 10.23% generated for the previous fiscal year, when it increased domestic and global stocks allocations in the light of the recovery in the equity markets.

However, some of the gloss was taken off the annual result after the GPIF posted a 0.8% loss during the final quarter of its fiscal year. The negative result was caused by a loss in value of the fund’s equity portfolio, as well as a 6% fall in the Topix stock index during the quarter.

At March 31, 2014, the fund held 16.47%, or 20.8 trillion yen, in domestic stocks, while the foreign equity allocation stood at 15.03%, or 19.7 trillion yen. 

In the past 12 years since the GPIF started managing public pension savings, the fund has made a total of 35.4 trillion yen in profit.

Japanese Prime Minister Shinzo Abe is pushing for the GPIF to restructure its portfolio, which has relied predominately on low yielding domestic bonds. The pension manager is preparing to announce a new portfolio make-up in the autumn, which will likely increase exposure to other asset classes, such as alternative investments.