Government Pension Investment Fund, Tokyo, reported a hefty 3% gain for the quarter ended Sept. 30, lifting the value of its portfolio to ¥167.5 trillion ($1.59 trillion), just shy of the record ¥169 trillion reached at the end of 2019.
The percentage return was equivalent to a ¥4.92 trillion gain.
It was the second quarter in a row of strong recovery from the ¥17.7 trillion loss GPIF suffered in the first quarter of 2020, when pandemic lockdown measures worldwide dragged the portfolio to a three-year low of ¥150.6 trillion. For the quarter ended June 30 the investment return was 8.3%, while for the three months ended Sept. 30 the investment return was 1.14%.
The portfolio's latest value was up 3.3% over the three months ended Sept. 30 and up 3.5% from the year before.
Continued strong monetary and fiscal policy stimulus, together with an easing of lockdown restrictions, buoyed equity prices at home and abroad, powering a 3.05% quarterly gain for GPIF's portfolio, Masataka Miyazono, GPIF's president, said in a comment posted on the fund's website.
GPIF's 25.88% allocation to overseas stocks delivered more than half of total gains, at ¥2.68 trillion, while the fund's 24.1% allocation to domestic stocks added another ¥1.96 trillion.
Foreign bonds, with a 23.5% weighting, delivered investment returns of ¥208 billion while domestic bonds, at 26.6%, added ¥75 billion.
The latest weightings were largely in line with the new asset allocation targets the fund's board adopted for the fiscal year that began April 1, with equal 25% weights for the four main asset classes of foreign and domestic stocks and bonds.
At the end of the prior quarter, GPIF had reported weightings of 27.5% for foreign equities, 24.4% for domestic equities, 21.8% for unhedged foreign bonds and 26.3% for domestic bonds.
