Asset AllocationFebruary 6, 2024

Japanese Pension Giant Rebounds in Fiscal Q3

The Government Pension Investment Fund’s investments returned 2.62% during the quarter that ended in December 2023, raising its asset value to more than $1.5 trillion.

Reported by Michael Katz

Japan’s Government Pension Investment Fund rebounded in the third quarter of fiscal 2023, returning 2.62%, after reporting a slight loss the previous quarter, to raise its total asset value to 224.7 trillion yen ($1.51 trillion). For the first three quarters of the fiscal year, which runs from April 1, 2023, to March 31, 2024, the pension giant’s investment portfolio has returned 12%.

The investment portfolio returned a total of 5.73 trillion yen for the quarter and 10.45 trillion yen during the first three quarters of the fiscal year.

Foreign equities were the GPIF’s top-performing asset class during Q3, returning 4.91%, followed by foreign bonds, which gained 2.55%. But both fell short of their respective benchmarks, which returned 5.17% and 2.56%, respectively. Domestic equities earned 2.05%, while domestic bonds returned 0.95%, both of which just beat their benchmarks, which returned 2.04% and 0.89%, respectively.

Through the first three quarters, the pension fund’s foreign equities returned 20.97%, or 10.45 trillion yen, compared with its benchmark’s return of 21.12% during the same time period. That was followed by domestic equities, which earned 19.62%, or 9.54 trillion yen, just shy of its benchmark’s 19.64% return. Meanwhile foreign bonds returned 9.95% during the same period, or 4.86 trillion yen, ahead of the benchmark’s 9.49% return, while domestic bonds lost 1.47%, or 816.1 billion yen, beating the benchmark’s 1.70% loss.

From the GPIF’s inception in 2006 through the third quarter of 2023, the pension fund has an annualized return of 4.34%, or 118.99 trillion yen. The pension fund’s asset allocation is 25.77% domestic bonds, 25.14% foreign equities, 24.66% domestic equities and 24.44% foreign bonds. The sum of the allocations exceeds 100% due to rounding.