The Government Pension Investment Fund (GPIF) said Friday it posted a record investment profit of ¥10.50 trillion in the October-December period, boosted by a rally in stocks at home and abroad after Donald Trump’s victory in the U.S. presidential election.
The world’s largest pension fund, GPIF logged the biggest investment profit for a quarter since fiscal 2001, when it started managing its investments on its own.
Strong performances in stocks, based on high expectations for economic policies by the new U.S. president, along with a weak yen expanding the value of foreign equities and bonds in yen terms, boosted the GPIF’s investment profit.
In the October-December quarter, the return on investment was 7.98 percent, and total assets stood at a record ¥144.80 trillion, according to GPIF.
“We were able to generate profits this time, but the global economy still faces difficult problems,” an official at the fund said. “We will make careful decisions on investments.”
By type of assets, the GPIF recorded an investment profit of ¥4.61 trillion in domestic stocks, ¥4.82 trillion in foreign stocks and ¥1.58 trillion in foreign bonds. The fund incurred a loss of ¥519 billion in domestic bonds as their prices fell, moving inversely to equities.
The results followed a profit of ¥2.37 trillion in the July-September period on the back of a recovery in global share prices following a financial market downturn triggered by Britain’s vote to leave the European Union last June.
The pension fund has boosted allocations to riskier assets since 2014, putting half of its funds in equities.
In fiscal 2015 ended March, the fund logged an investment loss of ¥5.31 trillion, incurring a loss for the first time in five years due partly to weak global shares.
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