The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
The world’s biggest pension fund posted the biggest quarterly
gain in its history as Japanese stocks surged and a plunge in the yen boosted overseas investments after Donald Trump’s election victory.
The Government Pension Investment Fund returned 8 percent, or 10.5 trillion yen ($92 billion), in the three months ended December 31, increasing assets to 144.8 trillion yen, it said in Tokyo on Friday. Domestic equities added 4.6 trillion yen after the benchmark Topix index recorded its best quarterly performance since 2013, outweighing a loss on Japanese bond holdings. Foreign stocks and debt jumped as the yen fell the most against the dollar in more than two decades.
The Japanese retirement fund’s second straight quarterly gain is a welcome respite after it posted losses that wiped out all investment returns since overhauling its strategy in 2014 by buying more shares and cutting debt. GPIF, which has more than 80 percent of its stock investments in strategies that track indexes, benefits when broader equity markets are rising.
“They must be breathing a sigh of relief,†said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo. “It’s going the way the government envisioned, with expected inflation rates rising and a movement from bonds into stocks in the market. The results were good.†Japanese shares returned 15 percent over the three months, matching a 15 percent gain in the Topix. Overseas stocks added 16 percent, largely due to a 13 percent drop in the yen against the greenback, the biggest such decline since 1995, which increases the value of foreign holdings when repatriated.
GPIF “invests with a long-term perspective and isn’t swayed by short-term market moves,†President Norihiro Takahashi said in a statement. The fund’s domestic bonds fell 1.1 percent for a second quarterly loss, bringing holdings to 33 percent of assets, as an index of Japanese government debt dropped 1.6 percent. Foreign bonds added 8.8 percent, accounting for 13 percent of GPIF’s investments at the end of last year.