* Makes 3.89 percent on investments, or $48.5 bln profit
* Posts first quarterly profit since April-June 2008
* Helped by recovery in domestic, overseas share prices
(Adds comments, breakdown of portfolios)
TOKYO, Aug 27 Japan's public pension fund, the
world's largest, turned its first quarterly profit in a year in
April-June thanks to a recovery in stock prices as markets
stabilised following the financial crisis.
The Government Pension Investment Fund (GPIF) on Thursday
reported a 3.89 percent return on its investments in the quarter
for a profit of 4.57 trillion yen ($48.5 billion).
Stung by the financial crisis after the collapse of U.S.
investment bank Lehman Brothers rocked global markets in
September, the GPIF posted a record annual loss of nearly $100
billion in the financial year that ended in March.
"Big gains in share prices both domestic and overseas have
helped increase our profits," Masahiro Ooe, director general of
GPIF's investment management section, told a news conference.
The performance of its investments improved as Tokyo's
Nikkei average .N225 climbed 23 percent and the Dow Jones
industrial average .DJI rose 11 percent during the three
The GPIF invests funds from national and corporate pension
plans in foreign and domestic stocks and bonds.
As of the end of June, the GPIF held about 121.86 trillion
yen in assets, up from 117.63 trillion yen in March.
The rate of return on market investments, which excludes the
Fiscal Investment and Loan Program (FILP) or Zaito bonds, was
4.85 percent, or a 4.49 trillion yen profit -- its biggest
quarterly profit since it started managing funds in 2001.
In the year to March 2009, it lost 10.03 percent on its
The GPIF saw big returns on stocks, though returns on bonds
Market investments in domestic bonds posted a small return
of 0.62 percent during the period, for a 381.1 billion yen
Its foreign bond holdings posted a 1.68 percent return, or a
167.7 billion yen profit.
The rate of return on the GPIF's investments in Japanese
stocks was 20.55 percent, for a profit of 2.34 trillion yen.
The rate of return in its investments in foreign shares was
17.64 percent, a profit of 1.6 trillion yen.
The GPIF's asset allocation in market investments was coming
close to its model portfolio.
By the end of June, the public pension fund, excluding Zaito
bonds, had 67.79 percent in domestic bonds, 10.81 percent in
Japanese stocks, 8.01 percent in foreign bonds, 8.40 percent in
foreign stocks and 5.00 percent in short-term assets.
It allocates its investments based on its model portfolio,
which gives a 67 percent allocation to domestic bonds, 11
percent to domestic stocks, 9 percent to foreign stocks and 8
percent to foreign bonds.
The allocation including Zaito bonds was weighted 70.72
percent in domestic bonds, 11.28 percent in Japanese stocks,
8.35 percent in foreign bonds, 8.76 percent in foreign bonds,
and 0.89 percent in short-term assets.
(Reporting by Chikafumi Hodo; Editing by Michael Watson and