Japan’s Government Pension Investment Fund, Tokyo, on Friday announced that the value of its investment portfolio was 127.3 trillion yen (US$1.23 trillion) as of the June 30 close of its fiscal first quarter.
The pension fund posted an investment gain for the quarter of 1.8%, said an announcement on the GPIF website. After payments to retirees, the value of the fund rose by 60 basis points from the prior quarter.
As of June 30, the GPIF’s allocation to Japanese government bonds fell to 53.4% of its portfolio, below its strategic asset allocation target of 60% and closing in on the 52% floor, which under normal circumstances would trigger a rebalancing.
However, with a high-level review of the GPIF’s asset allocation moving toward a conclusion over the next few months and a reduction in the pension fund’s domestic bond target at the top of the agenda, it’s unclear whether a rebalancing would occur. The government of Prime Minister Shinzo Abe is pressuring the GPIF to adopt an asset allocation approach more like that of other big sophisticated institutional investors around the globe, with higher allocations to stocks and alternatives.
The latest bond allocation was down from 55.4% as of March 31.
At the end of June, the GPIF’s allocation to domestic stocks edged up to 17.3% from 16.5% as of March 31, with 16% in international stocks, up from 15.6%.
International bonds, meanwhile, held steady at 11.1% of the portfolio, while cash accounted for 2.3%, up from 1.5% at the end of the prior quarter.