Japan’s PFA posts strong returns for 2013

12 May 2014   Category: News, Asia, Global, Japan   By Maya Ando

Japan’s Pension Fund Association (PFA), which oversees 10.7 trillion yen (US$105.19 billion) in corporate pensions, generated strong returns for fiscal year 2013 on the back of a recovery in global equity markets.

In corporate pensions, the PFA achieved a return of 10.33%, while employees’ pension funds and defined contribution funds achieved 11.6% and 9.51%, respectively.

For fiscal year 2012, the PFA paid out 676.3 billion yen to pension members.

The fund’s allocation for foreign equity is 26.1%, which generated a return of 32.43%, while domestic equities returned 18.56%.

Bonds account for 60% of the PFA’s portfolio, with overseas debt generating a return of 15.28%. Domestic bonds, which make up 38.3% of the association’s overall allocation, returned just 0.58%.

Over the last five years, domestic and foreign bonds have yielded an average of 2.21% and 5.71%, respectively, for the PFA, while domestic and foreign equities generated 11.48% and 20.87%, respectively.

The association has allocated 0.8% of its assets to alternatives such as real estate, infrastructure and private equity.

The PFA has seen its asset size gradually decrease since 2006, when the fund oversaw 13.1 trillion yen.