A rollercoaster year that produced wild quarterly swings evened out for Japan’s Government Pension Investment Fund, which eked out a 0.71% return in fiscal 2024. The gain, led by foreign equities, raised the pension giant’s asset value to approximately 250 trillion yen ($1.7 trillion). [Source]
During the year, the GPIF swung from a 3.65% gain in the first quarter to a 3.57% loss in the second quarter, back to a 4.31% return in the third quarter, and back again to a 3.41% loss in the fourth quarter.
All four of the pension fund’s asset classes—domestic and foreign equities and bonds—saw losses in the final quarter. The GPIF’s foreign equities portfolio performed the worst, losing 6% for the quarter, while domestic equities lost 3.5%, and domestic and foreign bonds fell back 2.2% and 2%, respectively.
Despite the dismal fourth quarter performance, foreign equities were the top-performing asset class for the year with a 6.6% return, followed by a 1.7% gain for the fund’s investments in foreign bonds. Meanwhile, the GPIF’s domestic bond portfolio lost 4.5% for the year, while its domestic equities portfolio was down 1.5%.
As of March 31, the pension fund’s asset allocation was 27.64% to domestic bonds, 24.37% to foreign bonds, 24.05% to foreign equities and 23.94% to domestic equities. For the quarter that ended December 31, the allocation was 25.51% to domestic bonds, 24.99% to domestic equities, 24.93% to foreign equities and 24.58% to foreign bonds.
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The GPIF’s domestic bond holdings increased by more than 2% during its fiscal fourth quarter, which amounts to approximately $28 billion. The shift comes after Japanese lawmakers called for the GPIF to increase its investments in domestic assets. However, the fund’s domestic equities allocation was down nearly 1% from the fiscal third quarter.
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Tags: Government Pension Investment Fund, GPIF, Japan
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