World’s Largest Pension Fund Hits $1.4 Trillion

Japan’s Government Pension Investment Fund fails to beat its 2014 return record after fourth-quarter stock and treasury slump.

A loss in its final fiscal quarter didn’t stop Japan’s Government Pension Investment Fund (GPIF) from hitting its best gain in three years, bringing the world’s largest pension fund to $1.4 trillion.

Producing a 6.7% total return, domestic equities were the fund’s top performer in the year ended March 31, followed by foreign equities. Local stocks reaped 5.5 trillion yen (up 15.66%), while those overseas returned 3.5 trillion yen (10.15%). Domestic bonds brought in 362 billion yen (.80%), and overseas debt increased by 674 billion yen (3.71%).

With the exception of losses in the final quarter, the fund, which provides pensions for public employees, has seen six straight quarters of gains. 

Losses from the first three months were a result of trade war fears, and a global dive in both equities and treasuries. This stopped the fund from beating its record 12% gain in 2014.

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Portfolio allocations were moved around in the latest fiscal year, with nearly every asset class getting a boost. The largest allocation, domestic bonds, now stands at 35% of the total portfolio, from 27.50% in 2017. Foreign bonds make up 15%, from 14.77%. Foreign and domestic equities are both at 25%. Foreign stocks were 23.88% last year, while domestic shares sat at 25.14% in 2017.

Short-term assets have been removed from the portfolio. In fiscal 2017, 8.7% of the portfolio was allocated to the class.

The changes to each asset class are part of the Japanese pension fund’s rebalancing during the fiscal year.

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Acting CIO of South Korean Retirement Plan Leaves

Cho In-Sik departs amid search for permanent successor at No. 3 biggest public pension program.

Cho In-Sik



The acting chief investment officer for the world’s third-largest public pension fund has resigned.

Cho In-Sik, head of the $559.6 billion National Pension Service’s global market division, had been temporarily helming the South Korean fund after the sudden departure of former CIO Kang Myoun-Wook last July. Kang was only seven months into his two-year contract, and quit after the state-run retirement system cancelled its global alternative investment head appointment.

Cho leaves as the fund restarts its CIO search, leaving the Korean pension plan with no head. While the reason for his resignation is unknown, according to The Korea Times and Korean Investor, it is believed that the departure relates to an internal audit regarding the pension service’s support of a controversial 2015 merger between Samsung C&T and Cheil Industries.

The National Pension Service now has four executive roles up for grabs, including Cho’s global market’s division role. Chae Jun-Kyu, the plan’s domestic equity division head, also lost his job last week as he allegedly created the report supporting the merger, the Korean news outlets report. Kim Jong-Hee, head of domestic fixed-income, is taking on Chae’s responsibilities in the interim.

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In addition, the global alternative division is also searching for a head. Choe Hyung-don is serving in the role for now.

Cho’s exit is the latest in a flock of resignations throughout the fund. Last year, 27 fund managers quit, after 30 left in 2016. The National Pension Service planned to hire 38 professionals in the first half of this year, but instead added 20.

The fund returned 7.28% in 2017.

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