World's Largest Institutional Investor Achieves Record Earnings

TOKYO, Mar 06 (News On Japan) - With Tokyo's Nikkei surpassed the 40,000-point mark for the first time in history, not only investors are benefiting from the rally, but also the Government Pension Investment Fund (GPIF).

Known as the "whale of the capital market," the GPIF manages and invests a portion of the pension contributions from the working population.

During a tour of their office, GPIF's spokesperson Mai Tameike explained, "GPIF has about 160 employees managing around 220 trillion yen. We oversee more than 150 funds, analyzing the situation of each individual fund."

With assets amounting to approximately 220 trillion yen, GPIF is the world's largest institutional investor.

"We don't buy and sell individual stocks. Instead, we entrust the management of stocks to investment firms," explained Tameike.

Pensions are funded by "insurance premium income" and "national treasury contributions," with surplus funds pooled as "reserves." GPIF aims to increase these reserves through investment. It invests in four categories: "domestic stocks," "foreign stocks," "domestic bonds," and "foreign bonds." In fiscal 2015, GPIF recorded a huge loss, becoming a target of criticism from the opposition in the Diet.

However, last year, GPIF recorded a profit of 34.3077 trillion yen, the highest annual earnings in its history. Japanese stocks alone contributed over 12 trillion yen in profits.

This year, the Nikkei Stock Average has already risen by approximately 20%. Domestic stocks alone may have generated additional profits in the trillions of yen.

"Of course, higher stock prices lead to increased investment returns. However, GPIF focuses on long-term diversified investment, so what's important is the long-term upward trend," said Tameike.

With unprecedented investment earnings, pension recipients are expressing hope: "I hope pensions will indeed increase," and "It would be nice if they actually went up."

However, according to Shingo Ide, chief researcher at Nissay Basic Research Institute, "Unfortunately, even if GPIF's profits increase, it doesn't mean that pensions will go up."

Source: ANN

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