Japan’s state-run Government Pension Investment Fund (GPIF), the world's largest pension fund, posted a positive 3.54 % return on its investment in the fiscal first quarter as global stocks rallied.
GPIF, which managed 149 trillion yen ($1.35 trillion), reported on Friday a gain of 5.1 trillion yen in the quarter ended June. In the same period a year earlier, GPIF posted a negative return of 3.88%, or a loss of 5.2 trillion yen, due to a tumble in global stocks.
The latest results show GPIF's shift to riskier assets continued paying off. In 2014, GPIF made a historic change by cutting its reliance on domestic bonds and increasing weightings of riskier assets. Japan's benchmark Nikkei 225 gained 5.9% during the quarter on investors' confidence that Japanese companies would post strong earnings.
Global stock markets rose after Emmanuel Macron's victory in France's presidential election eased investors' fears of political turmoil in Europe. GPIF said its Japanese stock portfolio made a 6.59% return, while its foreign stock portfolio posted a 5.48% return.
Its domestic bond portfolio made a negative return of 0.01 % in the quarter as yields for the 10-year government bonds stayed flat, GPIF said. The pension fund said its foreign bond holdings made a 4.45% return as the yen weakened against the euro during the quarter.
GPIF's Japanese stock holdings accounted for 24.41% of its assets, while its domestic bond portfolio made up 30.48%, it said. The pension fund allocated 23.91% to foreign stocks in the quarter and 13.53% to foreign bonds. The remaining 7.67% was held mainly in cash.
