Japan’s Government Pension Fund Returns 4.61% in Fiscal Q3

Japan’s $1.54 trillion Government Pension Investment Fund (GPIF), the world’s largest pension fund, reported a robust 4.6% return for its fiscal 2019 third quarter that ended Dec. 31 to earn a profit of 7.36 trillion yen ($67.4 billion) and raise its total asset value to 168.99 trillion yen.

The performance was a sharp turnaround from the third quarter of fiscal 2018, when the fund lost 9.06%, or 14.8 trillion yen, and out-clipped the first and second quarters of the fiscal year when it returned 0.16% and 1.14%, respectively.

Equities were the top-performing asset class for the fund during the quarter, and for the fiscal year-to-date period, as foreign equities returned 9.73% for the third quarter, just under the benchmark’s return of 9.76%, and 11.27% for the first three quarters combined, which was just above the benchmark’s return of 11.24%. Domestic equities returned 8.58% for the quarter, just missing the benchmark’s 8.59% return, and 9.62% for the fiscal year to date, compared with 9.63% cumulatively for the first three quarters.

Foreign bond investments earned 0.86% for the fund’s portfolio during the quarter, topping the benchmark return of 0.52%, and 3.04% through the first three quarters, which exceeded the benchmark’s return of 2.58%. Domestic bonds lost 0.96% during the quarter, but beat the benchmark, which lost 1.01%, and were up 0.15% for the fiscal year to date, compared to the benchmark’s gain of 0.06%. The overall portfolio is up 5.91% for the first three quarters of fiscal year 2019.

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The GPIF also reported that the rate of investment return from fiscal year 2001 to the third quarter of 2019 is 3.23% annualized for cumulative returns of 75.24 trillion yen. The fund did not provide a breakdown of its current asset allocation; however, its most recent annual report shows that it had 26.3% in domestic bonds, 25.53% in foreign equities, 23.55% in domestic equities, 16.95% in foreign bonds, and 7.67% in short-term assets.