Japan Pension Posts Record Bond Sales In Race to Reallocate to Stocks

For the past few months, Japan’s Government Pension Investment Fund (GPIF) has been carrying out its portfolio overhaul in full swing.

The fund is in the process of doubling its domestic and foreign stock holdings while significantly reducing its bond holdings.

That effort led to record Japanese bond sales in the fourth quarter of 2014, according to Bloomberg.

More from Bloomberg:

The $1.1 trillion Government Pension Investment Fund and its smaller peers almost doubled net sales of Japanese government bonds to 5.56 trillion yen ($46 billion) in the fourth quarter, the most in Bank of Japan figures dating back to 1998. They bought an unprecedented 2.39 trillion yen of foreign stocks and bonds. Selling of JGBs and buying of overseas securities has continued for six straight quarters.

[…]

Japan’s public pension funds raised domestic stock holdings for a fifth quarter, adding a net 1.73 trillion yen, the most since 2009. They held 5.6 percent of a record 1.023 quadrillion yen of outstanding JGBs at the end of December. The biggest holder, the BOJ, owned 25 percent of the total as of then, it said Wednesday in Tokyo.

Last month, Pension360 covered the early returns of the portfolio overhaul: the fourth quarter of 2014 was the best quarter ever for GPIF, with investments returning 5.2 percent.

The GPIF manages $1.1 trillion in pension assets and is the largest pension fund in the world.

Photo by Ville Miettinen via Flickr CC License