Japan’s Government Pension Investment Fund, Tokyo, on Friday reported a 1.84% investment gain for its fiscal second quarter, which ended Sept. 30, lifting the value of its portfolio to ¥132.1 trillion ($1.3 trillion).
The latest results marked a stabilization for the pension fund following two consecutive quarters of steep losses on the back of equity market declines at home and abroad, together with valuation losses on the portfolio’s overseas holdings resulting from the yen’s rebound in currency markets. GPIF had reported losses of 3.88% for the quarter ended June 30 and 3.52% for the quarter ended March 31.
Rebounds for equity markets at home and abroad during the latest quarter helped GPIF post ¥2 trillion in investment gains on its Japanese equity holdings and ¥1 trillion in gains on its overseas stock holdings. After losses on the portfolio’s Japanese government bond allocations, the fund reported investment income for the quarter of ¥2.374 trillion.
The pension fund’s latest asset allocation data suggested GPIF took risk off the table during the latest quarter, even as risk assets were stabilizing. As of Sept. 30, GPIF reported record cash holdings of 8.75%, up from 5.14% at the close of the prior quarter and 4.5% a year earlier.
GPIF’s holdings of domestic bonds dropped to 36.15%, from 39.16% as of June 30.
Elsewhere, the pension fund reported allocations of 21.59% to domestic equities, 21% to foreign equities and 12.51% to foreign bonds. At the close of the prior quarter, the corresponding allocations were 21.05% to domestic equities, 21.31% to foreign equities and 12.95% to foreign bonds.
With Japan’s benchmark equity index rising more than 5% over the quarter, the latest allocations suggest the GPIF didn’t move to rebalance its portfolio during the quarter toward the pension fund’s 25% target for domestic equities.
