February 7, 2020 / 6:48 AM / 16 days ago

Japan's GPIF posts $67 billion profit in third-quarter as stock markets rally

FILE PHOTO: The sign of Japan's Government Pension Investment Fund (GPIF) is seen in Tokyo, Japan, November 16, 2018. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) - Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, on Friday reported a profit of 7.4 trillion yen ($67 billion) in the third quarter, as both domestic and foreign stock markets rallied.

The GPIF, which managed 169 trillion yen of assets as of end-December, said its return on overall assets was 4.6% over the October-December period.

Japan's Nikkei stock average .N225 rose 8.1% during the quarter. The Dow Jones Industrial Average .DJI was up 7.4%.

Its Japanese stock portfolio achieved an 8.6% return and the foreign stock portfolio earned 9.7%.

The fund halted disclosing the amount and ratio of investments in different asset classes from the second quarter, as it aimed to avoid affecting the market with such details ahead of a planned portfolio review.

“Such disclosure may cause various speculations in the market. That is not good for the market as well as for us,” President Norihiro Takahashi told reporters last month.

The new portfolio is due to be finalised before the new fiscal year begins in April.

In 2014, GPIF made a historic shift by cutting its reliance on domestic bonds and increasing weightings of riskier assets in response to Prime Minister Shinzo Abe’s push to promote a risk-taking investment approach.

Given the ultra-low interest rate environment in Japan, the fund has recently retreated from unprofitable domestic bonds and pushed into foreign assets.

Reporting by Takashi Umekawa; Editing by Tom Hogue and Subhranshu Sahu

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