Japan's Government Pension Investment Fund reported on July 4 an 8.64% gain for its fiscal year ended March 31, leaving the portfolio of the world's largest pension fund valued at ¥126.6 trillion ($1.24 trillion.)
The fund's ¥10.2 trillion gain for its 12-month fiscal period nonetheless trailed its prior year advance of ¥11.2 trillion, mainly due to weaker returns on its allocation to Japanese government bonds, which continues to exceed 50% of the overall portfolio.
With Prime Minister Shinzo Abe pledging to lift Japan's economy from a prolonged deflationary spiral in favor of modest inflation, the GPIF's allocation to domestic bonds — which fell to 55.4% from 61.8% — yielded ¥365 billion in returns for the latest fiscal year, off sharply from ¥2.13 trillion for the previous year.
The fund's allocations to international stocks, domestic stocks and international bonds, meanwhile, continued to deliver solid returns.
International stocks grew to 15.6% of the overall portfolio from 12.4% the year before, and delivered investment gains of ¥4.74 trillion, up from ¥3.76 trillion. Domestic stocks — at 16.5% of the portfolio, up from 14.6% the year before — added ¥3.19 trillion, off slightly from ¥3.33 trillion the year before.
International bonds, meanwhile, accounted for 11.1% of the portfolio, up from 9.8% the year before, with a ¥1.78 trillion gain, off slightly from ¥1.82 trillion the year before.
