Government stops talk of firing big GPIF bazooka, and does it

The Government Pension Investment Fund has changed the allocation targets of its 126.6 trillion yen portfolio to 25% Japanese stocks (up from 12%), 25% foreign stocks (12%), 15% foreign bonds (11%) and 35% domestic bonds (60%) with no stated level for short-term.

GPIF announced the changes today immediately after the Bank of Japan said it would now aim for maintaining an expansion in the monetary base of 80tr yen, against 70tr previously, a process achieved largely by buying domestic bonds.

Both moves are aimed at kicking the stock market, inflation and the economy back onto more positive tracks – with the last benefiting from a fall in the value of the yen caused by increased outflows of capital from the Fund into investment markets abroad.

There is as yet no sign of the mooted economic restructuring which will be needed to provide momentum but other one-off moves, from the big three mutual aid associations, Japan Post Insurance and Serama, are waiting in the wings.

The shift at GPIF will put an additional 16.5tr yen into the stock market over the medium-to-long term. As Fund rebalances, it will allow its domestic equities holdings to deviate from their target by 9% (previously 6%) and local bonds by 10% (8%).

MAAs, Japan Post Insurance, Serama – it all adds up

A further 2.6tr will flow into local stocks if the three big mutual aid associations — those for local government officials, national public service personnel and private school employees –- follow GPIF’s lead, as they are expected to do.

Riches of even greater proportions could come from Post Office Insurance, part of the Japan Post Group which is due for an IPO next year, as it currently has none of it 85.804tr yen of assets in equities.

Similarly Serama (the Small Enterprise Retirement Allowance scheme) has 4.3tr yen of holdings – none of it in stocks.

So the government has much firepower to left to unleash after that from GPIF.

Many in the market guess that the Fund will implement the changes over be 2-3 years but there is no official word on the matter and it could be as long as five. This raises the interesting question of the value of the total portfolio to be allocated at that time.

Past the tipping point

GPIF is now in its decumulation phase with the number of retirees it serves rising every year while the number of contributing members falls. This will prevent domestic bond holdings from going much below 35% as it provides the liquidity from which pensions are paid.

GPIF portfolio 2002-2014Until the close of the past decade the value of the Fund’s portfolio was rising steeply as large blocks of capital moved under its control. When that phase ended it hit two years of poor returns and these combined with growing liabilities saw it shrink.

Better investment days then returned but the demographic trend has continued unstoppably.

The pensions behemoth says very little about its liabilities and any shortfalls it encounters are made up from tax receipts and, once inflation returns, via an ‘automatic adjustment mechanism’ (also called an automatic balancing mechanism).

But asset Japan population projection2managers and brokers looking for its business, or to the trends it is likely to set, are eventually likely to see as many stories about GPIF selling stocks to pay for pensions as they do today about it changing its asset allocation to improve returns.

In five years time will 25% of the portfolio be as much as it is today?

© 2014 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

 

 

Posted in Articles | Leave a comment

Engagement not yet in gear but motor seems to be ticking over

Misaki Capital has formed a strategic tie  with Sumitomo Mitsui Trust Bank and Sumitomo Mitsui Asset Management.

Founded in October 2013 by former staffers at Asuka Corporate Advisory, Misaki Capital said in March that it planned to offer, as early as May, a Misaki Engagement Fund which would seek dialogue with underperforming Japanese public companies. The new arrangement will presumably improve the marketing muscle needed for the launch to go ahead.

Misaki is led by Yasunori Nakagami, a co-founder of Asuka where he also worked on an ‘engagement fund’.

The new vehicle follows the launch in May 2012 of the TMAM-GO Engagement Fund, a joint venture between Tokio Marine Asset Management Co and Governance for Owners KK which is structured as UK limited partnership with TMAM-GO as the general partner. The Swedish national pension fund AP4 was one of its seed investors.

© 2013 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

Posted in Articles | Leave a comment

Mutual funds’ foreign holdings up by 11.51% in first half

The value of Japanese mutual funds’ US dollar -denominated holdings rose 11.51% in the first half of the 2014/15 financial to reach 14,628,549 million yen on 30 September, according to figures submitted to the Investment Trusts Association by its members.

ITA Sept '14 country totalsDuring the same six months the value of the yen fell against the greenback by6.07% to  US$1=109.67 from US$1=103.01. In Japan mutual vehicles are called ‘investment trusts’..

The value of the trusts’ investment in US stocks rose 9.13% to 2,146,034mn yen while their American bond holdings were up 7.69% to 4,954,817yen. These categories together account for 6,921,252mn yen with the bulk of the remainder coming from unspecified ‘investment securities’.

ITA Sept' 14 country per cent

The steepest overall climb was the 44% jump in securities denominated in the Qatari riyal which reached 34th place in the overall ranking by currency.

In equity funds the greatest growth was in Danish Krone investments which rose 41.40% to12,909mn yen placing them 21st.

In bond funds Indian rupee holdings topped the growth ranking jumping 162.01% to 27,474mn yen to reach 17th in place in the overall debt paper ranking. This is well below the fifth ITA Sept '14 equities countryposition the rupee occupies in stocks in which investment rose 32.06%  during the term to reach 222,279mn yen.

Almost immediately after the figures were published the Nikkei reported that Mumbai-basedICICI Bank would begin selling mutual funds in Japan via an arrangement with Eastspring Investments (formerly named Prudential Asset Management (Japan) Inc).

 

ITA Sept '14 foreign equities percent

ITA Sept '14 bonds

 

 

 

 

 

 

 

ITA Seot 2014 bonds percent© 2014  Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

 

 

 

 

 

 

Posted in Articles | Leave a comment

Life insurers reveal little of 2nd half asset allocation intentions

The results of Reuters latest poll of life insurers’ asset allocation intentions for the second half of the 2014/15 year — that is 1 October 2014 to 31 March 2015 — are in and reproduced below. They herald no dramatic moves.

For the composition of life companies’ portfolios at 30 June see  archive 28 August 2014 Life cos’s foreign assets up 12%, long awaited exodus begins. For the result of Reuters poll of April-September asset allocation intentions see archive 29 April 2014 Life cos’ tend to caution not big shifts in asset allocation.

TOKYO, Oct 24 (Reuters) – Japanese life insurers, which have combined assets of more than 180 trillion yen ($1.84 trillion) under management, are planning to shift some of their funds from domestic bonds to foreign bonds, as the Bank of Japan’s massive easing has suppressed domestic bond yields.

Below is a summary of the investment plans of Japan’s biggest life insurance companies for financial half year to March 2015, as obtained by Reuters in interviews and at news conferences this month.

Dai-ichi Life will hold a news conference on its investment plans next week.

FOREIGN BONDS

Nippon Life   to increase hedged bonds, to buy or keep steady unhedged bonds

Meiji Yasuda to increase holdings

Sumitomo       to take flexible stance after increase of Y700 bln in Apr-Sept

Mitsui               to increase holdings of unhedged foreign bonds slightly

Taiyo                 to slightly increase holdings, might reduce hedge ratio

Daido                to consider increasing holdings after buying Y300 billion in first half FY

Fukoku             to take a wait-and-see stance after an increase of Y80 billion in Apr-Sept

Asahi                 to raise holdings after an increase of 180 billion yen in Apr- Sept

 JAPAN BONDS

Nippon Life      to increase holdings but carefully consider amounts amid low yields

Meiji Yasuda    to increase holdings, but could allocate some funds to foreign bonds

Sumitomo         to increase holding, but less than Y200 bln

Mitsui                to increase holdings after having raised them by Y100 billion in Apr-Sept

Taiyo                  to likely maintain holdings after buying Y40 billion in first half FY

Daido                 to maintain holdings after selling Y50 billion in first half FY

Fukoku              to maintain holdings flat

Asahi                  to keep holdings steady, may buy near 10-year yield of 0.8 pct

JAPAN STOCKS

Nippon Life      to keep holdings steady

Dai-ichi             to look for chances to buy on dips

Meiji Yasuda    to cut holdings

Sumitomo         to keep holdings steady

Mitsui                to keep holdings steady

Taiyo                  to consider slightly increasing holdings

Daido                  to maintain holdings depending on market conditions

Fukoku               still has room to buy in 2H after invested in planned Y10 bln in 1H

Asahi                   to maintain holdings steady

 FOREIGN SHARES, ALTERNATIVE INVESTMENTS

Nippon Life   to keep foreign share holdings steady, increase loans

Meiji Yasuda     to increase investment in foreign shares, keep alternatives steady

Sumitomo          to keep holdings steady

Mitsui                 n/a

Taiyo                   n/a

Daido                  to maintain holdings

Fukoku               n/a

Asahi                   to increase holdings by about 10 pct

EXPECTED MARKET RANGES

Dollar/yen     Euro/yen         NIKKEI         JGB 10-yr     US 10-yr

Nippon Life     Y105 – 115   Y133 – 147    15,500 – 19,000   0.5 – 1.1%      n/a

Meiji Yasuda   Y102 – 112   Y130 – 145    13,000 – 17,000   0.4 – 0.9%     1.8 – 3.2%

Sumitomo        Y103 – 115   Y130 – 145    14,200 – 18,000   0.4 – 0.8%     2.0 – 3.0%

Mitsui                Y105 – 115   Y131 – 142    15,000 – 17,500   0.4 – 0.8%      2.0 – 3.0%

Taiyo                 Y102 – 112   Y125 – 145    14,000 – 19,000   0.4 – 0.8%      1.8 – 2.8%

Daido                Y100 – 120   Y120 – 160   14,000 – 18,000   0.4 – 1.0%      2.0 – 3.2%

Fukoku             Y100 – 112    Y125 – 145    13,500 – 16,500   0.4 – 0.75%     1.8 – 3.0%

Asahi                 Y102 – 115    Y128 – 143    13,000 – 18,000   0.4 – 0.8%      2.0 – 3.0%

(Reporting by Tokyo Markets Team)

Posted in Articles | Leave a comment

Déjà vu all over again for Government Pension Investment Fund

At the end of last week the Topix stock index was close to 12% down on its level three weeks earlier, there was widespread talk of Abénomics not working, and the value of the Japanese currency had been shown still vulnerable to sudden moves by ‘risk off’ investors.

Riding to the rescue came the talkative Prof Takatoshi Ito who last year chaired a panel looking at the asset allocation of the Government Pension Investment Fund, the world’s largest institutional investor, and how it could be rejigged to help Abénomics’ purposes.

On 14 October Prof Ito gave an interview to Bloomberg in which he signalled that GPIF would make allocation changes beyond what the market expected. He did so by the simple device of noting that the Fund would be ‘stupid’ to publicize any such changes in advance.

On Friday 17 October Bloomberg published these views along with Prof Ito’s comment that ‘GPIF should shift holdings as much as possible now … [but] … the fund doesn’t seem to be doing so.’

On Saturday 18th October the Nikkei newspaper ran a report entirely devoid of sources saying (quelle surprise!) that GPIF was working out plans to put 25% of its portfolio into Japanese stocks, not 20% as widely assumed, adding that the decision would be ‘finalized this month’.

In early trading on Monday 20 October the Topix index rose 3% to reach it highest since June 2013 with all 33 industry groups advancing.

Star dust or what? The promise of what GPIF will soon do has been used many times to boost the market but the fundamental question about how exactly Abénomics will generate durable momentum for both the economy and stock prices remains unanswered and, to some extent, unasked.

© 2014 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

 

Posted in Articles | Leave a comment

Mitsui Sumitomo Trust Bank still the power to beat in pooled

In the long-ago land before the mid-1990s when Japanese companies invested their pension funds solely via pooled accounts at trust banks or life insurers — like the US before the ERSIA legislation –  foreign institutions regarded the acquisition of a trust banking licence as giving them a toehold in a giant market on which they could build.

Only State Street Trust & Banking has remained in the sector since October last year. Then what was once Chase Trust Bank, before becoming SG, was acquired by the Sumitomo Mitsui Financial Group to become SMBC Trust Bank — which is unrelated to market-leader Sumitomo Mitsui Trust Bank which is part of Sumitomo Mitsui Trust Holdings and in Japanese is named the Mitsui Sumitomo Trust Bank (truly).  Text continues below table.

LIs & TBs pooled pension assets 2012-2014Among life insurance companies, which offer the same services but to smaller companies’ pension plans, only Gibraltar (formerly the US Prudential) and Axa Life remain following the decades-long consolidation in both banking and insurance. The merger mania began after Yasuda Trust & Banking had to be taken over by Fuji Bank (subsequently itself part of Mizuho Financial Group) in 1996 and a year later Nissan Life collapsed onto the arms to two subsequent owners before being absorbed into Gibraltar.

With the big domestic financial mergers now out of the way, a virtual non-poaching agreement in place and  pension funds — though still large — shrinking along with the population, the business of managing pooled pensions looks set to be one in which competitors strive to keep up rather than win market share.

The table, which uses data from the fortnightly newsletter Nenkin Joho, tells the story. The eagle-eyed will note that the total for trust banks is 10,000 billion yen less than the total for the same business given in the account based on Life Insurance Association of Japan figures reported below.

The LIAJ has long noted that the figures which it collects and publishes only as totals but of which it provides a breakdown to Nenkin Joho are at fair value. Nenkin Joho says that all the numbers it publishes including those from the LIAJ are at book value. This leads to the conclusion that Nenkin Joho‘s numbers for life cos are at fair value and those for trust banks at book.

© 2014 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

Posted in Articles | Leave a comment

Japan Post acquires 40% stake in Saison Asset Management

Japan Post Co has agreed to acquire 40% of Saison Asset Management according to Bloomberg. The fund firm is an investment trust company which at 31 March 2014 had stewardship of just 82.9 billion yen of mutual fund assets. At the same time top-ranked Nomura Asset Management had 18,337bn yen. The move is said to be aimed at improving the range of investment products which Japan Post offers clients at its thousands of branches.

The mail firm is one of three units of Japan Post Holdings which aims go to public next year. Saison Asset Management is a subsidiary of Saison Credit which also offers credit card, leasing and real-estate services.

© 2014 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

 

Posted in Articles | Leave a comment

Pooled corporate pension assets: fewer clients, better returns

Corporate pension funds money managed in pooled accounts at life insurers and trust banks grew by just 7.1% in the year ending 31 March 2014 to reach 84.54 trillion yen, figures published by the Life Insurance Association of Japan show.

The gain appears to be entirely from investment performance since the number of pooled acounts at LIs and TBs 2014pension fund clients declined by 2.80% during the term to 14,809 and the number of contributing members by 2.13% to 11.97 million.

The shrinking market was worse for the life cos which, by fiat, deal with smaller firms and asset values in the segment climbed by just 5.8% compared with the trust banks’ 7.4% — well behind the 13.8% annual gain in the segmented management sector.

The market could contract again next year as Employee Pension Funds (EPFs) are phased out and some may not qualify for conversion to DB funds.

Market share information comes from a source different from the headline numbers and will be available within the next two weeks.

© 2014 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

 

Posted in Articles | Leave a comment

Panel on best corporate practice sets 8% as minimum ROE

The final report* of a 53-member panel set up by the Ministry of Economy, Trade & Industry to debate the global standards of corporate governance most applicable to Japan received little media coverage when it was published last month. Now its chairman, Professor Kunio Ito of Tokyo’s Hitotsubashi University, has been talking to Blooomberg:

September 17, 2014

The shareholder-return target Japan’s government set last month will spur change at the majority of the nation’s companies that don’t meet it, said Scott Callon, an investor who advised on the policy.

The 8 percent goal for return on equity agreed in a trade ministry review shows executives, government officials and investors are determined to see higher profits at Japanese businesses, according to Callon, who was the only foreigner on the panel that decided the target. A specific level will focus companies and give asset managers a standard to press them to achieve, he said. Just 792 of the 1,816 stocks on the Topix index have equity returns of at least 8 percent.

“This is the first explicit statement ever by the Japanese government that a minimum return is necessary in a public company to fund Japan’s future,” Callon, who oversees about $2.5 billion as head of Ichigo Asset Management Ltd., said in an interview in Tokyo on Sept. 8. “Driving low-performing companies to minimum acceptable levels is the biggest task. If you can get every company to 8 percent or above, that’s transformational.”

The report on best practices at the nation’s companies and financial industry, known as the Ito review after the panel’s chairman Kunio Ito, of Hitotsubashi University in Tokyo, is the latest measure aimed at making Japan’s companies more profitable and less prone to holding cash as the nation exits 15 years of deflation. Other steps include a government-backed stock index that picks companies with high profits and a stewardship code to enlist asset managers to engage in dialogue with firms on improving performance.

Below Average

The 44 percent of Topix companies making the grade compares with 78 percent of firms in the Standard & Poor’s 500 Index, data compiled by Bloomberg show. The profit delivered on shareholders’ funds at Topix companies was half the global average in the 10 years through 2013. The measure fell 0.5 percent today in Tokyo, while the Nikkei 225 Stock Average slid 0.1 percent.

The review says Japan’s ROE falls short because profit margins are “significantly lower” than in the U.S. and Europe and companies hold excessive cash and deposits. The 8 percent target was picked because it exceeds the cost of equity capital assumed by most overseas investors, the review states.

“I would describe this project, along with much of the revitalization strategy, as Japan opening up to the world,” said Callon, 49. “One powerful way to motivate Japanese actors is to say, ‘this is what the global standard is.’”

53 Members

The 53-member panel of academics, company representatives, investors and government officials debated for a year about which global best practices could be applied to Japan, paying particular heed to European models of corporate governance, Callon said, as they are less combative than the U.S. approach. While one goal was to attract overseas investors, the project’s ultimate motivation was to make the most of the nation’s assets in a mature economy with a shrinking population, he said.

The 130-page report, modeled on the Kay Review in the U.K., calls for the establishment of a forum for companies and shareholders to discuss issues from how businesses should disclose information to ensuring “constructive dialogue” between executives and investors. The debate about how companies are run in Japan has often been presented as a choice between focusing on customers and staff or shareholders, whereas those are not mutually exclusive, Callon said.

The management-investor forum will start this fall, most likely from October, and meet two or three times a year, Ito said at a conference in Tokyo on Sept. 10.

ROE Debate

A focus on ROE isn’t new in Japan and has its own dangers, according to Hajime Kitano, an equity strategist at Barclays Plc in Tokyo. The Ito review is a “rehash” of a book published in 1994, Kitano wrote in a note last month. The ROE level set is arbitrary, and too high as efforts to boost profit margins through cost cutting may end up amplifying deflationary pressures and shrink the economy, he said.

Others have the opposite concern. Targeting a specific level of ROE could create a misunderstanding that reaching that goal is enough, Naoki Kamiyama of Bank of America Corp.’s Merrill Lynch unit in Tokyo wrote in a report dated Aug. 13.

For Callon, who has degrees from Princeton and Stanford universities, the report is already having having an impact.

Ichigo Asset “went to see a Japanese public company last week,” he said. “The head of finance said he had assigned the Ito review to every single person in the finance department. They had all read it.”

Boosting Japanese companies’ performance through corporate governance was positioned as a key pillar of Prime Minister Shinzo Abe’s growth strategies announced in June.

No Place

“Business in Japan is being transformed,” Abe said in a letter translated by Merrill Lynch and read out at its investor forum in Tokyo on Sept. 10. “Strengthening corporate governance is at the top of my reform agenda. There will be no place for the old-style company in the age of Abenomics.”

The Ito review also criticizes Japan’s sell-side analysts, saying an overly short-term focus and insufficient fundamental analysis are problems that need to be addressed.

Mitsubishi UFJ Morgan Stanley Securities Co. is changing to a “back-to-basics approach” due to the criticism of the industry in the Ito review, and will focus more on company fundamentals, the brokerage wrote in a note dated Sept. 5. It’s changing its rating system from one that forecasts returns versus the Topix to peer comparisons or absolute returns.

The Ito review is supposed to complement the stewardship code, the JPX-Nikkei Index 400 and rules on corporate governance currently being planned by the Financial Services Agency and the Tokyo bourse, according to Callon, who says the change taking place in Japan has support across the spectrum of government and industry.

“The mainstream has gone full acceleration for reform,” said Callon, who’s been in Japan for 25 years. “It’s the first time in my career I’ve seen that.”

* For the full text of the report or an executive summary go to http://www.meti.go.jp/english/press/2014/0806_04.html and scroll down to “Text of the report”.

http://www.businessweek.com/news/2014-09-16/profit-laggards-seen-catching-up-as-japan-seeks-8-percent-return

Posted in Articles | Leave a comment

At pension funds demographics + decumulation = 20/30% JGBs

Figures just published* by the Japan Investment Advisors’ Association show that corporate and civil service pension schemes’ assets managed in segregated accounts under mandates held by JIAA member firms the rose only 0.53% in the first quarter of the 2014/15 financial year, ending 30 June, to reach 26,563.3 billion yen despite a 2% rise in the Nikkei 225 during the period and gains for European and US stocks. Year-on-year the number was up by 2.15%.

Such constrained increases are largely a result of the demographics that have drawn the funds into an era of decumulation where they will forever have more going out annually in benefits than they have coming in each year via contributions, and the gap is widening.

During the quarter the amount which JIAA members managed for the Government Pension Investment Fund rose 1.76% to 79,772.3bn yen, almost exactly three times what they invested for non-GPIF customers. While this rise was 4.53% year-on-year most of it came before the current financial year began.

(The sum managed for GPIF by JIAA member firms omits amounts under the stewardship of Resona Bank and Mitsubishi UFJ Trust and Banking, neither of which is a JIAA member, and the yen fixed-income portfolio which is managed in-house. It is therefore is less than than the giant’s own number for its total assets.)

While the number of mandates held in respect of non-GPIF funds fell again to reach 4,727, the lowest in a decade, mandates from the Fund rose to 232 from 226 a year ago.

All told, assets under management rose 2.48% quarter-on-quarter to 172,423.0bn yen of which 25,714.4bn yen came from overseas customers.

The JIAA does not break down its numbers to show in what asset classes each type of investor puts its funds.

Assuming that the amount under management for foreign clients is invested in Japan, then domestic clients, of which pensions make up 74%, appear to allocate their funds as follows:

  • Japan bonds 32.94% (down from 35.41% a year ago and 33.02% a quarter ago)
  • Japan stocks 26.25% (up from 23.82% and 25.43%)
  • Foreign bonds 27.49 (compared with 27.42% and 27.50%)
  • Foreign stocks 18.71% (compared with 16.43% and 18.32%).
  • The rest is in ‘real-estate related securities ’ and short-term investments.

Such dispositions are not inconsistent with the percentages reported by Pension Fund Association members (see story below), all of which are from the private sector. JIAA totals for Japanese pension funds other than GPIF are different from those of the Bank of Japan because they cover only segregated accounts and thus do not include money in pooled ‘general accounts’ at life insurers and trust banks (for an update on which see this blog next week).

GPIF has such a huge weight in JIAA totals that it is difficult to discern any trends among corporate schemes. However, it does appear that they too are holding on to their Japan Government Bonds. This is partly a function of their need for cash to pay mounting benefits bills.

JIAA numbers do not include amounts managed for mutual funds. These appear instead from the Japan Investment Trusts Association.

* Currently in Japanese only at www.jiaa.or.jp/toukei. Usually available in English after about one week at www.jiaa.or.jp/toukei_e/index.html

© 2014 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

Posted in Articles | Leave a comment