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Japan revamps investment panel of world's biggest pension fund

  • Japan has overhauled the investment committee of its $1.26T Government Pension Investment Fund (GPIF), the world's largest pension fund.
  • Prime Minister Shinzo Abe wants the GPIF to improve returns by making higher-risk investments and reducing its reliance on low-yielding government bonds.
  • Citigroup believes that the Bank of Japan could increase its bond-buying to offset reduced JGB purchases by the GPIF.
  • The revamp is part of Abe's "third arrow" of his strategy to reform the economy and lift Japan out of deflation.
  • Because of its mammoth size, the GPIF is closely watched as a bellwether for Japan's institutional investors. Last June, it increased its weighting of domestic stocks and lowered that for Japanese bonds.
  • ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, NKY, JYN, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JPNL, JSC, ITF, JGBL, JPP, JGBT, JPNS, JGBB, HEWJ, FJP
Comments (1)
  • Viper740
    , contributor
    Comments (126) | Send Message
     
    Reshuffling chairs on the Titanic.

     

    When the perception among investors/GPIF is that inflation will hit 2% and your bonds pay only close to 0%, something has to give, or else they are losing money on those bonds.

     

    Likely scenario: GPIF stops buying Japanese bonds -> Bank of Japan (BOJ) becomes buyer of last resort -> BOJ prints yen in order to buy the bonds, since they are broke -> Japanese yen tanks
    23 Apr, 05:39 AM Reply Like
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