Japan's public pension fund, the world's biggest, said Friday it has swung back from huge losses, providing some respite after coming under fire for moving a chunk of its bond-heavy portfolio into riskier equities. The Government Pension Investment Fund said it had a return of 1.84 percent, or 2.37 trillion yen ($21 billion) in the three months through September, boosting its total assets to 132.1 trillion yen.
Gains in Japanese and foreign stocks helped offset a loss on its bond holdings, the fund said.
The figure comes after two straight quarters of losses totalling about 10 trillion yen.
In 2014, the fund said it would double the amount of equities it holds to generate higher returns. "It'll take some pressure off," said Naoki Fujiwara, chief fund manager at Shinkin Asset Management, in Tokyo.
"This quarter will probably be good too. But before we all get too excited, we need to be wary about whether this can continue for long," he told Bloomberg News.
The conservative fund was criticised for its decision to push into stocks. It then posted in July-September last year its worst quarterly fall since 2008, hit by a global equity sell-off fuelled by fears over China's economy. The strategy shift announced in 2014 was aimed at dealing with Japan's soaring number of retirees who depend on the mammoth pension.
Unlike some overseas counterparts, Japan's pension fund has long kept the majority of its cash in super-safe and super-low return Japanese government bonds. But with a growing number of retirees and shrinking workforce straining government finances - and Tokyo struggling to boost the world's number three economy - Japan's pension fund managers are looking for ways to improve their returns.
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