Government Pension Investment Fund (GPIF) posted its biggest quarterly loss since 2020 as a rebound in the yen erased gains on overseas securities and domestic stocks declined.
GPIF, one of the world¡¯s largest state pension funds, incurred losses in three of four major asset classes ¡ª foreign stocks and bonds as well as Japanese equities ¡ª with only domestic debt generating a positive return. The result may damp speculation the fund will increase stock holdings in an attempt to boost overall returns next year when it sets a new model portfolio.
¡°When the GPIF raised its allocation target to domestic stocks in the past, it started increasing domestic equity holdings ahead of the official policy change,¡± said Hidenori Suezawa, a fiscal analyst at SMBC Nikko Securities. ¡°Today¡¯s results at least had no hint of that happening.¡±
The fund saw a loss of 3.6% in the three months through September, with assets totaling ?248.2 trillion ($1.6 trillion), it said in Tokyo on Friday. Holdings of Japanese bonds increased to 26.74% of total assets from 25.85% in June, while domestic stocks decreased to 23.98% from 24.37%.
The weakness of currencies versus the yen weighed on overseas investments, with losses of 5.4% for stocks and 5.5% for bonds. Japanese stocks dropped 4.9%, while domestic debt returned 1.4%.
During the quarter, the MSCI All-Country World Index of global stocks gained 6.2% and the S&P 500 added 5.5% as the Topix lost 5.8%. Yields on 10-year Treasurys dropped more than 60 basis points, while benchmark Japanese bond yields shed almost 20 basis points. The dollar fell 11% against the yen.
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