Japan’s giant pension fund wiped out losses with ¥8 trillion profit in 2016

The Government Pension Investment Fund on Friday said it logged a profit of ¥7.94 trillion ($69.8 billion) in fiscal 2016, wiping out last year’s ¥5.31 trillion loss.

The world’s largest institutional investor said the return on investment during the past year to March 31 was 5.86 percent, compared to minus 3.81 percent the previous year.

“Quarterly results can be volatile. We look to make investments that pay off in the long run,” President Norihiro Takahashi told a news conference.

The gains — the result of equity market rallies in Japan and overseas — boosted GPIF’s assets to a record ¥144.90 trillion.

By asset type, Japanese stocks yielded ¥4.55 trillion in profit, while foreign stocks generated ¥4.33 trillion. GPIF lost ¥395.8 billion on Japanese bonds and ¥596.2 billion on its investment in foreign bonds.

In 2014, the fund adopted a more aggressive investment strategy that entailed larger fund allocations for riskier assets such as stocks, while cutting its holdings of domestic bonds.

Toyota Motor Corp. made up the largest chunk of GPIF’s domestic stock holdings as of March 31 at ¥1.20 trillion, followed by Mitsubishi UFJ Financial Group Inc. at ¥822.2 billion. Its foreign stock holdings were led Apple Inc. at ¥660.2 billion.

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