Japan Pension Investment Fund - Economist

Japan's Government Pension Investment Fund announced on Friday, August 6, that it achieved a return on investment in the first quarter of this year of 4.98 trillion yen, which is equivalent to 45.3 billion dollars, thanks to gains in foreign stocks, after a record annual return achieved in the last fiscal year. ended March 31.

The world's largest pension fund said it managed 191.6 trillion yen in assets at the end of June, and the return on comprehensive assets was 2.86% during the first three-month period.

The fund relies heavily on a passive index-tracking strategy, so its returns usually reflect market movements.

The Japanese Nikkei index fell 1.3% in the first quarter, while the Dow Jones Industrial Average rose 4.6%. Accordingly, the fund's portfolio of Japanese stocks incurred a loss of 0.25%, while the foreign stocks portfolio gained 8.62%.

Given the large size of the fund's assets, we find that many analysts closely follow the investments of the Japanese fund as investors, and the fund has moved its portfolio away from non-profitable domestic bonds and moved towards high-yielding foreign assets, given the very low-interest rates in Japan.

At the end of June, Japanese bonds accounted for 25.39% of the fund's portfolio, while foreign bonds amounted to 24.72%, local stocks amounted to 24.49% and foreign stocks amounted to 25.41%.