Japan's GPIF earns $45.3 billion Q1 return due to gains in foreign stocks

The sign of Japan's Government Pension Investment Fund (GPIF) is seen after a news conference in Tokyo, Japan, April 1, 2016. REUTERS/Thomas Peter/File Photo

TOKYO (Reuters) - Japan's Government Pension Investment Fund (GPIF) said on Friday it posted a first-quarter investment return of 4.98 trillion yen ($45.3 billion) due to gains from foreign stocks, after a record annual return in the last financial year ended March 31.

GPIF, the world's largest pension fund, managed 191.6 trillion yen of assets as of end-June and its return on overall assets was 2.68% over the three-month period, it said in a statement.

GPIF relies heavily on a passive index-tracking strategy, so its returns usually mirror market movements. While Japan's Nikkei stock average fell 1.3% during the quarter, the Dow Jones Industrial Average was up 4.6%.

Its Japanese stock portfolio achieved a 0.25% loss and the foreign stock portfolio earned an 8.62% return.

GPIF's investments are closely watched by global investors because of the fund's sheer size. The pension fund has been shifting its portfolio away from unprofitable domestic bonds toward higher-yielding foreign assets, given ultra-low interest rates at home.

As of end-June, the fund had 25.39% of its portfolio in Japanese bonds, 24.72% in foreign bonds, 24.49% in domestic equities and 25.41% in foreign equities.

In the last financial year, GPIF posted a record investment return of 37.8 trillion yen, as market sentiment rose in tandem with progress made in vaccination programmes worldwide aimed at controlling the pandemic.

($1 = 109.8300 yen)

(Reporting by Takashi Umekawa; Editing by Muralikumar Anantharaman)

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