Record gain and assets for world's largest pension fund

Japan's Government Pension Investment Fund (GPIF), the world's largest pension fund, experienced its most robust quarter in over two years as global stock and bond market gains propelled the value of its assets to a record high, as reported by Bloomberg.

During the three months ending in March, the GPIF recorded a 5.4% increase, elevating its total assets to $1.39 trillion, according to the fund's announcement in Tokyo. Foreign equities delivered the highest returns, surging by 8.2% as the US banking crisis began to recede, while Japanese shares advanced by 7%. Overseas and domestic bonds also experienced gains, while the yen weakened against the dollar due to the Bank of Japan's continuation of its accommodative monetary policy.

“Although we had a very volatile market environment in the financial year, thanks to the effect of diversification in our portfolio, we have made a return,” GPIF President Masataka Miyazono said at a press conference in Tokyo, as quoted by Bloomberg.

This return allowed GPIF to recover from a slump that lasted four consecutive quarters, during which it lost over 9 trillion yen in asset value. This slump represented the fund's longest losing streak in two decades. Japanese stocks have rebounded so swiftly this year that domestic pension funds may have sold trillions of yen worth of securities last month to realign their portfolios.

In the first three months of this year, the MSCI All-Country World Index, which tracks global stocks, gained 6.8%, and the S&P 500 Index rose by 7%, while Japan's Topix index increased by 5.9%. Yields on 10-year US Treasuries decreased by 41 basis points, and Japanese government bond yields decreased by 9 basis points.

On an annual basis, the GPIF achieved a gain of 1.5%. Holdings of overseas stocks yielded a return of 1.8%, while domestic shares gained 5.5%. However, domestic bonds experienced a loss of 1.7%, and foreign bonds incurred a minimal loss of 0.1%.

Furthermore, the latest GPIF results indicated that the fund has completely withdrawn its investments from Custody Bank of Japan Ltd., one of its former custodian banks.