ICYMI - Japan’s GPIF will maintain its current allocation ...0

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ICYMI - Japan’s GPIF will maintain its current allocation

Japan's GPIF (world's largest government pension investment fund) announcement late Monday:

Portfolio composition unchanged: Japan’s GPIF will maintain its current allocation — equally split between domestic stocks, domestic bonds, foreign stocks, and foreign bonds — through 2025 and beyond.

    Return target raised: The fund increased its mid-term investment return target to 1.9% above nominal wage growth, up from 1.7%, effective through fiscal year 2029.

    Risk approach: While a higher stock allocation could help achieve the new target more easily, the GPIF believes it’s still attainable with a more conservative, bond-heavy mix.

    Historical performance: Since 2001, the GPIF has averaged an annual return of 4.24%.

    Market speculation eased: The update dispels recent speculation that the fund would shift more heavily into equities following the return target increase proposal in December.

    Past allocation changes: In its 2020 review, GPIF increased foreign bond exposure from 15% to 25% and reduced domestic bonds from 35% to 25%.

    This article was written by Eamonn Sheridan at www.forexlive.com.

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