TOKYO, Mar 06 (News On Japan) –
With Tokyo’s Nikkei surpassed the 40,000-point mark for the primary time in historical past, not solely buyers are benefiting from the rally, but additionally the Government Pension Investment Fund (GPIF).
Known because the “whale of the capital market,” the GPIF manages and invests a portion of the pension contributions from the working inhabitants.
During a tour of their workplace, GPIF’s spokesperson Mai Tameike defined, “GPIF has about 160 employees managing around 220 trillion yen. We oversee more than 150 funds, analyzing the situation of each individual fund.”
With belongings amounting to roughly 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,” defined Tameike.
Pensions are funded by “insurance premium income” and “national treasury contributions,” with surplus funds pooled as “reserves.” GPIF goals to extend these reserves via funding. It invests in 4 classes: “domestic stocks,” “foreign stocks,” “domestic bonds,” and “foreign bonds.” In fiscal 2015, GPIF recorded an enormous loss, turning into a goal of criticism from the opposition within the Diet.
However, final 12 months, GPIF recorded a revenue of 34.3077 trillion yen, the best annual earnings in its historical past. Japanese shares alone contributed over 12 trillion yen in earnings.
This 12 months, the Nikkei Stock Average has already risen by roughly 20%. Domestic shares alone might have generated extra earnings within 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,” mentioned Tameike.
With unprecedented funding earnings, pension recipients are expressing hope: “I hope pensions will indeed increase,” and “It would be nice if they actually went up.”
However, in keeping with 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