[ad_1]
The Japanese Government Pension Investment Fund (GPIF) lost 11 percent, or 17.7 trillion, in the three months to March inclusive. yen ($ 164.7 billion), the fund said in Tokyo on Friday. The decrease in value was the largest, based on comparable figures in 2008. April, and reduced the value of the fund’s total assets to 150.63 trillion. and in. Foreign equities were the worst performing investment, while domestic equities showed similar dynamics.
The results are announced a few months after the fund restructured its senior management and revised its asset allocation to focus more on external debt. The losses that have erased the gains made during the fiscal year could draw the attention of politicians, as social security remains a serious concern for tens of millions of Japanese retirees.
“The decline in domestic and foreign stocks led to negative returns in the fiscal year,” said Masataka Miyazono, president of GPIF, “Both stock markets showed excellent dynamics in 2019, even taking into account the impact of trade talks between States United States and China. The global coronavirus pandemic has led investors to adopt a risk-averse stance. “
Foreign bonds were the only high-value asset that generated a positive quarterly return. The values rose 0.5 percent compared to 0.5 percent. domestic bond losses, 18 percent. local common shares and 22 percent. foreign securities In April, GPIF increased its asset allocation in favor of foreign bonds by 10 percent. aims at 25%, while maintaining the same objective for foreign and domestic shares at 25%.
According to Naoki Fujiwara, fund manager at Shinkin Asset Management Co., the losses were not unexpected. The value of the securities has recovered since March, so the pension fund should offset losses in April-June. point, said F. Fujiwara.
“The current portfolio faces a risk of capital volatility,” he said. “We currently live in underperforming conditions, and such conditions are likely to continue for the next two years, so the situation may not be bad yet, but in the long term, the pension fund should adjust the distribution of shares.” .
Under the leadership of new GPIF executives, President Miyazon and Chief Investment Officer Eiji Ueda, the fund has to maneuver in a price-sensitive market torn apart by the coronavirus pandemic and promises of economic stimulus measures. Concerns about the second wave of the outbreak are already hampering the recovery of global stock markets.
GPIF is in no rush to buy foreign bonds that are less than 3 percent. Target distribution indicator, Miyason told reporters in Tokyo. The fund has set a much longer term for 10-20 year long-term investments, he said, adding that the one-year results will not affect retirement benefits.
Investment in ESG, a measure of sustainability, reached a record 5.7 billion. yen level. GPIF, a leader in socially responsible investment, has invested in indices such as FTSE Blossom Japan, MSCI Japan ESG Select Leaders and MSCI Japan Empowering Women.
During January-March. The MSCI All-Country World Index fell 22 percent and the S&P 500 Index fell 20 percent in the third quarter, while Topix fell 18 percent. Yields on 10-year US government bonds fell 125 basis points over the same period, while yields on Japanese government bonds increased three basis points. The Japanese yen was up 1 percent against the US dollar and nearly 3 percent against the euro.
Since April, GPIF has adjusted its portfolio, setting a goal of maintaining 25%. indicator in the four asset classes, with the possibility of a corresponding deviation. The fund allows national stocks to deviate by 8%. 25% points, for foreign shares – 7%. points. Internal debt can deviate by seven percentage points, the debt related to external debt securities – 6 percent. points. On Friday, Mr. Miyason stated that, as analyzes of specific examples show, the new portfolio is less risky than the previous one.
[ad_2]
