NewsmakersJuly 10, 2019

Japan’s Sovereign Wealth Fund Surpasses Norway’s as World’s Largest

A 1.5% return for fiscal 2018 raises the fund’s total asset value to $1.46 trillion.

Reported by Michael Katz

Japan’s Government Pension Investment Fund’s (GPIF) investment portfolio returned 1.52%, or 2.38 trillion yen ($22.1 billion), for the fiscal year 2018 ended March 31, raising its total asset value to 159.215 trillion yen, or approximately $1.464 trillion. This makes it the largest pension fund in the world. with Norway’s Government Pension Fund Global behind by nearly $400 billion.

As of the end of March, the Norway fund had a market value of 8,938 billion kroner, which is equal to approximately $1.033 trillion at current exchange rates. Norges Bank, Norway’s central bank, has a ticker on its website that is a real-time running tally of the fund’s market value, which at the time of the writing of this article was 9,276 kroner, or approximately $1.073 trillion. While that was up $40 billion thanks in large part to strong first quarter results, it still puts it well behind Japan’s fund.

Japan’s fund managed to eek out positive gains for the year despite a rough fiscal third quarter ended December 31, when its investments tumbled more than 9% and the portfolio shed more than 14.8 trillion yen in value.

For fiscal 2018, foreign equities was the top-performing asset class for Japan’s GPIF, returning 8.12%, followed far behind by foreign and domestic bonds, which returned 2.7% and 1.4%, respectively. The worst-performing asset class for the fund was domestic equities, which lost 5.09% for the year.

Japan’s GPIF also reported that its annual rate of return has been 3.03% since fiscal 2001, bringing in cumulative returns of 65.82 trillion yen, which is more than 41% of its current total asset value.

The asset allocation for the fund as of the end of March was 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.

The portfolio is tech-heavy when it comes to equities as its four largest equity holdings as of March 31 are Microsoft, Facebook, Apple, and Amazon, with stakes worth $8.8 billion, $7.9 billion, $7.3 billion, and $4.2 billion, respectively, as of July 9. The portfolio also has nearly $3.4 billion worth of shares in Johnson & Johnson, just under $3.3 billion in JPMorgan Chase, and a $3.2 billion stake in Visa.