Japan’s GPIF Posts Worst Quarterly Loss Since Covid Outbreak

The pension giant lost 3.6% during the second quarter due to foreign bonds and falling domestic stocks.

Japan’s Government Pension Investment Fund swung to a loss of 3.57% during the second quarter of the of the fiscal 2024 from a 3.65% gain the previous quarter. The results were the pension giant’s worst quarterly loss since its assets tumbled more than 10% during the outbreak of the Covid pandemic at the end March 2020.

For the first half of the year, the GPIF lost 0.05%, narrowing from a 0.31% loss during the year-ago period. GPIF’s assets totaled 248,227.7 billion yen ($1.612 trillion) at the end of the second quarter.

Foreign bonds weighed down the GPIF’s portfolio the most during the quarter, falling 5.51% and just below its benchmark’s loss of 5.47%. Foreign equities lost 5.35%, missing its benchmark’s loss of 5.07%. Finally, domestic equities declined 4.92% just shy of the 4.90% loss registered by its benchmark.

The GPIF noted a sharp drop in Japanese equities during the quarter after the Bank of Japan raised interest rates. Domestic bonds were the only assets with a positive return at 1.42%, just ahead of its benchmark’s 1.35% return.

For more stories like this, sign up for the CIO Alert newsletter. 

As of the end of September, the pension fund’s asset allocation was 26.74% domestic bonds, up from 25.85% the previous quarter, while foreign equities accounted for 24.98% for the quarter, down from 25.34% in the first quarter. The fund’s foreign bonds’ allocation declined slightly to 24.30% from 24.45%, while the GPIF’s domestic equity holdings amounted to 23.98% of the portfolio, down from 24.37% the previous quarter.

The GPIF’s target allocation is 25% for foreign bonds and 25% for domestic equities, plus or minus 7%, while the allocation for domestic bonds and foreign equities are 25% each, plus or minus 8%.

Eduard van Gelderen Appointed Head of Research at FCLTGlobal

The appointment of the former PSP Investments CIO is effective December 15.

By Matt Toledo

FCLTGlobal, a non-profit that aims to help institutional investors drive long-term value creation named Eduard van Gelderen, former CIO of Canada’s Public Sector Pension Investments, as head of research.

Van Gelderen had joined PSP in 2018 and department in October.

A number of global institutional investors are members of FCLTGlobal, including APG, BlackRock, the California State Teachers’ Retirement System, PSP Investments, Future Fund, and many of the largest asset owners in the world.

“We are delighted to welcome Eduard as our new Head of Research. His extensive leadership experience, deep understanding of long-term investment strategy, and proven track record in shaping sustainable investment practices will be instrumental in advancing our research agenda,” said Sarah Keohane Williamson, CEO of FCLTGlobal in a statement.

For more stories like this, sign up for the CIO Alert newsletter. 

As an organization, FCLTGlobal seeks to promote long-term investing. According to the nonprofit’s website, 90% of executives said that long-term horizons would improve investment performance. Despite this, 50% of executives said that they would delay value-creating projects if it meant missing quarterly earnings targets.

Prior to his role at PSP Investments, van Gelderen was a senior managing director at the University of California and was was previously CEO of Dutch pension manager APG. He is currently chair of the Alternative Investment Management Association Global Investor Board.

Van Gelderen holds a master’s degree in quantitative finance from Erasmus University Rotterdam and a post-graduate degree in asset liability management from Maastricht University. He is a PhD candidate at the international School of Management in Paris.