Tokyo: The world’s biggest pension fund posted its first profit in four quarters as stocks rebounded, providing some respite for the Japanese state money manager after critics lambasted it for taking on too much risk.
The Government Pension Investment Fund returned 1.8 percent, or 2.4 trillion yen ($21bn) in the three months ended September 30, boosting assets to 132.1 trillion yen, it said in Tokyo on Friday. Domestic and foreign equities added 3.1 trillion yen as they recovered from their Brexit rout, outweighing a loss of 706.9bn yen on bond holdings.
The profit comes after the fund lost more than 15 trillion yen over the previous three quarters, wiping out all investment gains since it overhauled its strategy in 2014 by boosting shares and cutting debt. As Japanese stocks extend their advance and US equities climb to fresh records after Donald Trump’s election win, the prospect of further strong performance may help quash complaints at home that GPIF’s investing approach is too dangerous.
“It’ll take some pressure off,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo. “This quarter will probably be good too. But before we all get too excited, we need to be wary about whether this can continue for long.”
Prime Minister Shinzo Abe said in parliament that, "The fund’s short-term losses aren’t a problem for Japan’s pension finances."
GPIF’s purchases of stocks are a “gamble,” opposition lawmaker Yuichiro Tamaki said.
