* Foreign stocks return +4.87%, helps overall performance
* Japan stocks posts 2nd straight quarter of loss
* GPIF's asset size $1.32 trln, equivalent to Australian GDP
By Chikafumi Hodo
TOKYO, Nov 30 Japan's GPIF, the world's largest
public pension fund, logged an investment gain of $6.5 billion
for July-September compared to a loss in the prior quarter, as a
rise in foreign equities helped lift its overall performance.
Fund managers and market dealers around the world closely
watch the performance of the Government Pension Investment Fund,
known as GPIF, due to the size of its portfolio, which is
equivalent to the economy of Australia.
GPIF posted a rate of return of a positive 0.49 percent in
July-September, a reversal from a negative return of 1.85
percent for the previous quarter.
The performance translated into an investment gain of 528.7
billion yen ($6.46 billion), compared with a fall of 2.069
trillion yen in April-June.
The public fund's total assets fell to 107.7 trillion yen
($1.32 trillion) by the end of September from 108.2 trillion yen
The GPIF is believed to have sold assets during the quarter
to raise cash for pension payouts.
Healthy investment returns are vital for the fund as it has
been paying out more in benefits than it receives in
contributions to the national pension system since the 2009/10
For the current financial year, ending next March, in which
the first wave of Japan's baby boomers is set to turn 65 and
becomes eligible to receive full pension payments, the fund aims
to generate about 8.87 trillion yen in cash for pension payouts.
LAGS CALPERS, CPPIB
The GPIF is under pressure to raise returns to cope with a
rapidly ageing population, although it takes a conservative
stance with largely passive management of its massive portfolio.
The public fund's rate of investment return in the six
months to September was minus 1.39 percent.
GPIF lagged behind foreign counterparts such as Calpers (the
California Public Employees' Retirement System), which produced
a positive return of 3.4 percent, and the Canada Pension Plan
Investment Board (CPPIB), which showed a positive return of 2.4
percent during the same six months.
The GPIF invests reserves of national and employees' pension
plans and allocates nearly two-thirds of its assets to Japanese
Yields on benchmark 10-year JGBs fell to a 9-1/2 year low of
near 0.7 percent this week.
The GPIF achieved its biggest investment gain from foreign
stocks, with a positive return of 4.87 percent for the quarter,
a performance largely in line with the benchmark MSCI Kokusai
The public fund logged a positive return of 0.49 percent in
Japanese bonds. From foreign bond investments, it produced a
positive return of 0.56 percent.
It performed poorly in Japanese stocks, with a negative
return of 3.43 percent, or an investment loss of 439.4 billion
This was the second straight quarter of negative return in
domestic stocks, with the six-month performance to September
worsening to minus 12.92 percent, or a 1.83 trillion yen loss.
The Topix index of all first-section shares on the
Tokyo stock market fell more than 4 percent in the three months
to Sept. 30.
The public fund said its performance in domestic equities
was hurt by falls in the chemical and transport equipment