Japan’s GPIF Loses $37 Billion in First Half of Fiscal 2022

Japan’s Government Pension Investment Fund’s portfolio lost 0.88% during the second quarter of fiscal year 2022, adding to a 1.90% loss during the first quarter to bring its total investment losses for the first half of the year to approximately 2.77%, or 5.472 trillion yen ($37.38 billion).

For the second quarter that ended Sept. 30, the world’s largest pension fund reported a loss of 1.72 trillion yen, as its asset value declined to 192.1 trillion yen, or approximately $1.31 trillion.

Foreign bonds weighed down the pension giant’s portfolio as its worst-performing asset class for the quarter, declining 1.54% or 764.4 billion yen; however, this beat its benchmark, which lost 1.78% during the same period. Japanese equities lost 0.84%, or 367.9 billion yen, for the quarter, underperforming its benchmark, which lost 0.79%. The portfolio’s investments in Japanese bonds were down 0.79%, or 398.2 billion yen, compared with its benchmark’s loss of 0.66%. Its foreign equities lost 0.49%, or 191.6 billion, outperforming its benchmark’s 0.55% loss.

Despite being the worst performer during the quarter, foreign bonds managed to be the pension fund’s only asset class in the black for the first half of the year, returning 1.14%, or 550.7 billion yen, and beating its benchmark’s return of 0.83% during the same period.

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Foreign equities were the worst performing asset class for the first half, losing 5.83%, or 2.806 trillion yen, but ahead of its benchmark, which declined 6.03%. The pension fund’s Japanese equity investments are down 4.49% after two quarters, or 2.16 trillion yen, just below its benchmark’s loss of 4.41%. Its investments in Japanese bonds dropped 2.09%, or 1.036 trillion yen, missing the benchmark’s performance of a loss of 1.95%.

As of the end of September, the asset allocation for the portfolio was 27.26% in Japanese bonds, 25.04% in foreign bonds, 23.86% in foreign equities and 23.84% in Japanese equities.