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February 2024
AAM Magazine
February 2024
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Japan’s GPIF third-quarter income buoyed by foreign stocks

By Hui Ching-hoo   
February 7, 2024

Japan’s Government Pension Investment Fund (GPIF) earned 5.72 trillion yen (US$38.4 billion) investment income in the three months to December, the third quarter of its current financial year, buoyed by its holdings in foreign stocks.

It was a rebound from the preceding three months when the world’s largest pension fund reported a 683.2 billion yen investment loss, and also from the third quarter of the financial year ended March 2023 when it lost 1.85 trillion yen as US rate hikes to rein in inflation roiled global markets in 2022.

The investment return for October through December was 2.62%, GPIF says in a statement on February 3.

The pension fund’s foreign equity investments returned 4.91% and was its best-performing asset class, both in the quarter and the first nine months of the financial year to March 2024, when its return on these investments was 20.97%. The nine-month return beat the Dow Jones Industrial Average Index’s 13% gain over the period.

Local equities also helped boost GPIF’s investments in the nine-month period as improved corporate earnings and a weak yen made Japan’s stock market one of the best performers in the world last year.

The pension fund earned a return of 19.62% on its investments in local equities from March through December, including 2.05% in its third financial quarter.

The GPIF’s assets under management jumped 18.3% to 224.7 trillion yen as of December 2023 from 189.9 trillion yen a year ago. Its annualised investment return since its formation in 2001 was 3.99%.